Alaska Asks Conoco to Reopen Kenai LNG Terminal

The state of Alaska reportedly wants ConocoPhillips to reopen its mothballed Kenai LNG export terminal.

In a September 5 letter to ConocoPhillips President Trond-Erik Johansen, acting Natural Resources Commissioner Joe Balash, requested that Conoco applies for a three-year federal LNG export license for the terminal, according to local media reports.

“Without market opportunities for gas discoveries, companies lack the incentive to invest in continued exploration activities,” he wrote. “In addition to the economic challenges this would present for those employed in the Cook Inlet energy industry, a lack of healthy exploration now may lead to supply contractions in the future as existing wells’ production levels decline.”

ConocoPhillips in March said it would not extend its LNG export license after March 31 unless more gas becomes available, after meeting local demand.

The Kenai LNG terminal is located in Nikiski, on the Kenai Peninsula, approximately 60 air miles from Anchorage, and it is the sole U.S. plant in operation that has authorization to sell domestically produced LNG to non-FTA countries.

It began operating in 1969, after the nearby North Cook Inlet Gas Field was discovered in 1962. Nearly all LNG produced at the plant has been sold via contracts with two Japanese utilities. While new export projects are underway, the Kenai LNG facility has for more than 40 years been the only LNG export plant of domestic production in the United States.

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LNG World News Staff, September 18, 2013; Image: Conoco