NEWS BULLETIN

May 05, 2014 --- Vol. 20, No. 28May 2014

Furie preparing for shipment of Kitchen Lights platform

Fabrication of the offshore platform for Furie Operating Alaska's Kitchen Lights gas field in Cook Inlet is nearing completion, Damon Kade, president of Furie, told Petroleum News in a May 2 email. The platform, the Kitchen Lights unit Platform A, is scheduled to be loaded onto a barge at Ingleside, Texas, at the end of May for shipment to Alaska - the platform is expected to arrive in Cook Inlet in July, with completion of the offshore installation anticipated in early September, Kade said.

Meantime, land clearing has started at the site of Furie's planned gas processing facility near East Forelands on the Kenai Peninsula. A twin subsea pipeline will connect the offshore platform to the processing facility, which will feed gas into the Kenai Peninsula gas pipeline system.

Outfitting of the vessels and barges needed to install the platform and lay the pipelines is under way in Washington state, Kade said. The vessels and barges will start arriving in Cook Inlet in June, he said. The platform will be located about 10 miles north of Boulder Point, near Nikiski, on the Kenai Peninsula.

Furie has previously said that it anticipates that gas production from Kitchen Light will start in the third quarter of 2014.

- Alan Bailey

ConocoPhillips has earnings of $598M in Alaska in 1Q

ConocoPhillips Co. reported $598 million in adjusted earnings in the first quarter in Alaska.

The earnings represent a 10 percent increase year-over-year and a nearly 8 percent increase quarter-over-quarter despite falling production, steady oil prices and increased spending, reflecting changes to the fiscal system put into place earlier this year.

"Our first quarter production taxes would have been about the same under the old tax system as under the 2013 More Alaska Production Act," ConocoPhillips Alaska Vice President of Finance Bob Heinrich said in a statement, referring to the old Alaska's Clear and Equitable Share system. "The difference is that the More Alaska Production Act will encourage industry to spend more to increase production, because the new tax law allows the industry to keep a more equitable share of the benefits of higher oil prices."

Those opposed to the new fiscal system saw the profits as proof that the law favors industry over the public. "Under the previous oil tax structure, both Alaska and the oil industry benefited," Vic Fischer, a constitutional delegate and a primary sponsor of a measure to repeal the law, said in a statement. "The state was able to put away $17 billion in savings. Now three of the richest companies in the world are reaping handsome profits from Alaskans' oil, while we wonder which essential services will have to be cut next."

The question of whether to keep or repeal the current system will go before voters in a referendum on the primary ballot this August, near the release of second quarter earnings.

- Eric Lidji

LNG carrier arrives at Nikiski facility

The first LNG vessel to pick up a cargo of liquefied natural gas from ConocoPhillips' LNG facility on Alaska's Kenai Peninsula since the re-opening of the facility has arrived at the dock in Nikiski, ConocoPhillips spokeswoman Amy Burnett has told Petroleum News. The vessel, called the Excel, will carry the first of six cargoes to be exported from Nikiski to Japan this year, Burnett said.

In 2013 ConocoPhillips mothballed the facility because of uncertainties over gas supplies from the Cook Inlet basin. However, a resurgence of the Cook Inlet gas industry has encouraged the company to restart the plant. On April 14 the U.S. Department of Energy issued a new export license, giving permission for the export of up to 40 billion cubic feet of gas per year through the plant to non-free-trade-agreement countries such as Japan.

- Alan Bailey

See stories in May 11 issue, available online at 11 a.m., Friday, May 9 at www.PetroleumNews.com


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