Glenfarne Partnership May Leave Enstar Customers Paying Dearly for LNG

Enstar's decision to partner with Glenfarne for importing liquefied natural gas (LNG) could lead to higher costs for Southcentral customers. The utility company has stated that it expects imported LNG costs to be between $16 and $22 per thousand cubic feet by 2033, which is more than the current average price of about $11.

Enstar's decision not to work with Hilcorp on imports is due to a contract dispute last year. However, partnering with Glenfarne creates a conflict of interest as Glenfarne promotes exports through its Alaska LNG project. This raises concerns that Enstar may be motivated to prioritize the North Slope pipeline over cheaper import options.

The Regulatory Commission of Alaska has expressed concerns about the efficiency and costs associated with multiple import and purchasing operations. A large procurement consortium, rather than multiple entities in the market purchasing smaller volumes of LNG, could exercise more buying power and secure gas at lower prices.