Kenai Peninsula Borough welcomes news of reopened LNG plant

KENAI — An Alaska borough is welcoming the news that a liquefied natural gas plant will resume exports next year.

 

Kenai Peninsula Borough Mayor Mike Navarre tells the Peninsula Clarion that the ConocoPhillips plant in Nikiski will help area employment and economic activity.

“I think that it’s great for the borough because it means we’ll keep those jobs and the economic activity,” he said.

The plant currently employs between 40 and 50 people. The plant is in winterization mode, but is scheduled to resume exports in the middle of next year.

Behind the decision were new gas contracts and the leasing of a liquefied natural gas tanker for additional deliveries to Asia. Exports from the plant began in 1969. Officials have said all exported liquefied natural gas, or LNG, went to Japan.

At the peak, about 64 billion cubic feet a year were exported. But volumes were falling, leading the company to suspend operations in November.

A ConocoPhillips spokeswoman says the company has arranged for a tanker to export liquefied natural gas, but is still negotiating with a buyer.

“We expect about four cargos in the second half of the year,” said ConocoPhillips spokesperson Natalie Lowman.

The company is keeping confidential the details of its contract, including who is providing the gas.

Independent oil and gas company Buccaneer Energy announced Thursday that it had a gas sales contract with ConocoPhillips beginning this month. The sale will cease once the Cook Inlet Natural Gas Storage Alaska facility comes online.

Buccaneer has an agreement to sell gas to Anchorage-based Enstar Natural Gas Company. A Buccaneer spokesman said the sales to ConocoPhillips will give his company a financial boost while helping it act as a test for production before sales to Enstar begin.

Buccaneer’s initial supply will come from a Kenai well, and more wells are planned in the Kenai loop in 2012.

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