ConocoPhillips suspends Alaska LNG ops

For the time being ConocoPhillips does not plan to apply for a new Department of Energy license for the export of liquefied natural gas, or LNG, from the company’s LNG plant at Nikiski on Alaska’s Kenai Peninsula, ConocoPhillips spokeswoman Amy Burnett told Petroleum News in a March 4 email. The current export license expires on March 31.

Oil and gas fields of the Cook Inlet basin have until recently supplied gas for both the LNG plant and for Southcentral gas and power utilities. But, with gas supplies from the aging fields tightening, there are major concerns about the adequacy of supplies for utility use and there are now few, if any, supplies for export.

“For the future, ConocoPhillips will consider pursuing a new export authorization only if local gas needs are met, and there is sufficient gas for export,” Burnett said. “Right now, we are unaware of a sufficient gas supply to support exports. We still have the flexibility to resume operations and apply for a new export authorization if sufficient gas becomes available.”

Volumes of LNG exported from Nikiski have declined considerably in recent years. Burnett said that during 2012 four cargoes shipped from Nikiski to Asia.

Asked whether there is a possibility that the LNG plant might at some point be converted for LNG imports, an option that the utilities are considering as a means of obtaining additional gas to bolster dwindling Cook Inlet supplies, Burnett said that ConocoPhillips is aware that the utilities are pursuing a number of options for meeting Southcentral gas demand.

“We support these efforts,” Burnett said. “We have stated in the past that the Kenai LNG Plant has the potential for reconfiguration to serve as an import facility. Plans for the plant will depend primarily on gas availability, local gas needs, various regulatory decisions and market conditions.”

—Alan Bailey