REI project in holding pattern, evaluating situation at present

Resources Energy Inc., the Japanese company with plans to build a liquefied natural gas facility on Alaska’s Cook Inlet for the export of LNG to Japan, has its project on hold for the time being. In September the company said that it was anticipating a decision around the turn of the year on whether to proceed to the front-end engineering and design phase of the LNG project. The company envisages building a 1 million ton-per-year LNG plant near the existing port at Port MacKenzie, across the Knik Arm from Anchorage, to process about 160 million cubic feet per day of Cook Inlet gas.

Mary Ann Pease, REI vice president, told Petroleum News in a Feb. 3 email that the company had not yet moved into the FEED stage of the project. The REI project is “waiting and evaluating the various options, given the recent announcement on the ConocoPhillips (LNG) plant and related stories associated with the announcement,” Pease said. Pease was referring to the ConocoPhillips announcement in November that it was putting up for sale its LNG plant at Nikiski on the Kenai Peninsula. That plant has in the past exported LNG to Japan using Cook Inlet gas as feedstock. The plant has been idle since 2015 because of poor market conditions for LNG.

In January the Alaska Gasline Development Corp., the state corporation that is hoping to build a gas export pipeline from the North Slope, told the Alaska Legislature that it was considering the purchase of the ConocoPhillips plant. The plant is near the planned site of a much larger LNG plant that would be built as part of the North Slope gas export project and would enable an early LNG production scenario for buyers, an AGDC official told the Senate Resources Committee.

ConocoPhillips spokeswoman Amy Burnett told Petroleum News in a Feb. 8 email that her company is still in the early stages of marketing the Nikiski facility. A virtual data room opened on Jan. 10, to provide critical information for potential buyers to assess the asset prior to deciding whether to make a formal bid. Interested parties are currently reviewing the data room material and ConocoPhillips anticipates receiving bids later in the year, Burnett said. The company is not currently in negotiation with any party over the sale, she said.

- ALAN BAILEY