ConocoPhillips to resume LNG exports from Alaska

April 14, 2014

Map from ConocoPhillips 2013The US Department of Energy (DOE) has granted ConocoPhillips Alaska Natural Gas Corp. (CPANGC) blanket authorization to export liquefied natural gas (LNG) from its facility at Nikiski, about 70 miles southwest of Anchorage, on the Kenai Peninsula, to non-free trade agreement (FTA) countries.

The export authorization is for a period of two years and a cumulative export volume of about 40 Bcf, sourced from Alaska's Cook Inlet.

On 19 February 2014, ConocoPhillips received a similar authorization to export to FTA countries, after submitting an application on 11 December 2013 with the DOE's Office of Fossil Energy.

CPANGC and its predecessors have been permitted to export LNG from Alaska to Japan and other Pacific Rim countries for 47 years, and the Kenai LNG Plant was the world’s largest plant when built.  However, ConocoPhillips let its most recent authorization lapse on 31 March 2013, amid perceived uncertainties about whether supplies in the Cook Inlet region were adequate to meet regional needs. Exports were stopped in 2012 because of shortages of natural gas in Cook Inlet fields, but recent drilling has created a surplus. In this latest authorization, DOE said would-be export gas was not needed to meet area demand in the Cook Inlet region. However, winter gas production will be reserved for local utilities.

In its non-FTA application, CPANGC cited a letter from Alaska's Department of Natural Resources (DNR) in which DNR argued that exports of liquefied Cook Inlet gas provided a necessary stimulus for further development of the Cook Inlet.

"I'm glad ConocoPhillips will be able to add to Alaska's 40-year history of supplying natural gas to Japan," said US Sen. Lisa Murkowski (R-AK), the ranking Republican on the Senate Energy and Natural Resources Committee and a proponent of LNG exports from Alaska and the Lower 48. "Today's announcement by DOE also highlights the growth that's occurring in Cook Inlet, where there is now ample gas supply to both meet local needs and help out our friends overseas."

US Senator Mark Begich (D-AK) said, “This is great news for the cradle of Alaska’s oil and gas industry on the Kenai Peninsula. With plenty of gas available to meet local needs through at least 2018, we’re seeing the kind of job growth responsible oil and gas development can provide.”

ConocoPhillips spokeswoman Amy Burnett said the company will reopen the Kenai LNG plant, and resume shipments of LNG in May, with five shipments planned for this year. Map at right from ConocoPhillips Alaska, 2013.

Related stories:

Subcommittee passes LNG exports bill, 9 April 2014



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