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Alaska asks company to revive redundant LNG plant

LNG Industry,

In a bid to encourage petroleum companies to invest in Cook Inlet, the Alaskan state have requested that ConocoPhillips revive its inoperative Kenai Peninsula liquefied natural gas (LNG) unit. The US Geological Survey has suggested that the Cook Inlet basin could contain trillions of ft3 of gas. Joe Balash, Natural Resources Commissioner, contacted Trond-Erik Johansen, President of ConocoPhillips, to request that they apply for a three-year federal LNG export license for the Nikiski LNG unit.

Although ConocoPhillips had announced in March that it would be terminating its natural gas export license, it left open the possibility of renewing the license if the demands of local gas markets were met and natural gas was on hand to export.

Despite having overseen contracts to ensure that local demand is supported until 2018, Joe Balash remained uncertain about the future: “Without market opportunities for gas discoveries, companies lack the incentive to invest in continued exploration activities. 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.” Balash stressed the importance of “aggressive exploration” and increasing market opportunities.

Natalie Lowman of ConocoPhillips said “We’re going to begin evaluating this and working with stakeholders to evaluate the feasibility of resuming LNG export.”

Edited from various sources by Ted Monroe

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