ConocoPhillips Applies for Alaska LNG Export License

ConocoPhillips is seeking approval from the US government to resume exports of liquefied natural gas (LNG) from its Kenai Peninsula plant.

If the company is given the green light from the US Department of Energy to export 20 billion cubic feet of LNG annually for a two-year period, local supply needs would be prioritized.

ConocoPhillips spokesperson Natalie Lowman told reporters that the company had contracts throughout south-central Alaska through 2018 to meet local needs.

The plant was shut down in March when ConocoPhillips’ export license expired and gas supplies were limited due to declining production in Cook Inlet.

However, since then, new discoveries in the inlet by independent oil and gas companies have again raised the possibility of exports.

In a September letter to ConocoPhillips, Alaska National Resources Commissioner Joe Balash requested that the plant be reopened to provide a market for companies exploring for natural gas.

Explorers and producers have welcomed ConocoPhillips’ LNG export application, which will provide a market for gas discoveries made by Buccaneer Energy and Furie Operating Alaska. Furie plans to install a gas production platform and a pipeline next summer.

Buccaneer Energy has also made a gas discovery offshore from Anchor Point, on the east side of Cook Inlet. The discovery is still being evaluated for possible development, however.

"With all the Southcentral utilities having gas under contract through March 2018, this is a welcome boost to the Kenai Peninsula economy. Even seasonal shipments of LNG will add jobs and create incentives for exploration and competition, helping to keep prices lower for Alaskans,” Senator Mark Begich said in a 22 December statement in response to ConocoPhillips’ application to resume exports.

Senator Begich supported a two-year extension of ConocoPhillips’ Nikiski LNG export facility's permit in July 2010. The facility began operation in 1969 and for more than 40 years was the United States' only LNG export facility.

By James Burgess of Oilprice.com