ConocoPhillips files to resume LNG exports from Alaska

ConocoPhillips Alaska Inc. has filed an application with the U.S. Department of Energy to resume LNG exports from Alaska, a company spokeswoman said Dec. 12.

The company plans to reopen its mothballed liquefied natural gas plant at Nikiski, on the Kenai Peninsula, to operate on a seasonal basis, spokeswoman Natalie Lowman said.

The company also has installed equipment at the plant to allow trucks to be loaded with LNG for delivery within Alaska, she said.

“With support from many local stakeholders, and in consideration of a request from the state of Alaska, ConocoPhillips Alaska has submitted an application to the U.S. Department of Energy to resume exports of LNG from the Kenai Facility. The application was submitted Wednesday, Dec. 11, 2013,” Lowman said in a statement.

“We do not anticipate having gas available for export in the winter,” she added, because regional utilities will be given a priority.

The company has applied for a two-year export authorization to export about 20 billion cubic feet of gas per year as LNG, Lowman said. 

Independent oil and gas companies exploring in Cook Inlet said they were pleased at the announcement. Buccaneer Energy and Furie Operating Alaska, two independents, have made gas discoveries and Furie is confident enough in its discovery that the company plans to install a gas production platform and a pipeline next summer.

Buccaneer Energy also has 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.

Hilcorp Energy, another independent which now operates former Chevron and Marathon Oil producing wells, has invested and developed more gas from the aging fields, as has Cook Inlet Energy, also an independent, which is redeveloping wells on the Osprey platform and West MacArthur River field on the Inlet’s west side.

In a statement, Buccaneer’s CEO, Curtis Burton, said he was pleased: “ConocoPhillips applying to the U.S. Department of Energy to resume LNG exports from Alaska is a very good move for them, for the State of Alaska, and for independents in the Cook Inlet. Assuring a market for natural gas near term is critical to ensuring that the Cook Inlet has enough gas to satisfy local needs both now and in the future.”

Although production of LNG and exports were suspended, the plant has been maintained for a possible restart and no reductions of personnel were made, ConocoPhillips has said.

The plant was built in 1969 by Phillips Petroleum and Marathon Oil Co. Phillips merged with Conoco to become ConocoPhillips and, more recently, Marathon sold its share of the plant to ConocoPhillips.

The plant operated until last year when the export license expired and declining gas production in Cook Inlet limited amount of gas available.

Given that recent discoveries have been made in the Inlet by the independent companies, State Natural Resources Commissioner Joe Balash wrote a letter in September to ConocoPhillips asking the plant be restarted to provide a market for companies exploring for natural gas.

Balash also asked for the plant to be equipped with the equipment to load trucks, which ConocoPhillips has done.