December 16, 2011 / 8:38 AM / 8 years ago

ConocoPhillips to resume LNG exports from Kenai, Alaska plant

ANCHORAGE, Alaska, Dec 16 (Reuters) - ConocoPhillips will restart exports from its liquefied natural gas plant in Kenai, Alaska, a 42-year-old facility that had been slated for shutdown, a company spokeswoman said late on Thursday.

ConocoPhillips has acquired new contracts for natural gas supplies from Cook Inlet producers, including Buccaneer Energy Ltd., said company spokeswoman Natalie Lowman.

“We’ve found enough gas supply to be able to resume exports,” Lowman said.

ConocoPhillips has also leased an LNG tanker to restart the plant’s decades-long export business with Asian markets, she added.

Exports are expected to resume in the second half of 2012, Lowman said. As of yet, there are no plans to seek an extension for the license that allows ConocoPhillips to export LNG until 2013, she added.

Lowman declined to identify the prospective Asian LNG customers, saying ConocoPhillips was still working on contracts.

ConocoPhillips acquired full ownership of the plant in September when it bought Marathon Energy’s 30 percent share in the facility.

The plant opened in 1969 and, in its early years, supplied all the LNG used by Tokyo Gas and Tokyo Electric. Over time, availability of Cook Inlet natural gas diminished and the Japanese utilities acquired alternative sources of LNG, leaving the Kenai plant with short supplies and little customer demand.

The Kenai plant was scheduled to be mothballed last spring. But energy shortages caused by the Japanese earthquake and tsunami spurred a temporary demand in Asia for extra deliveries, and the plant continued exports through November, when shutdown procedures started.

In a statement, Australia-based Buccaneer said its supply contract with ConocoPhillips will commence this month, when production at its Kenai Loop property is expected to begin.

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