ConocoPhillips Looks to Sell Kenai LNG Plant
ConocoPhillips has announced that it is looking to sell its 1960s-era LNG plant in Kenai, Alaska.
Kenai LNG was a pacesetter, the only export facility of its kind in North America for nearly fifty years. Although it is now idle, it was among the longest-running LNG plants in the world: for decades, it exported its product to Japan, shipping over 1,300 loads over the course of its operations.
ConocoPhillips said in a statement that it is focused on opportunities on the North Slope right now, and that Kenai LNG is a "strategic asset that offers good opportunities for the right buyer." The firm says that the plant is operational and could begin exporting again. The Department of Energy issued a new export permit for it in February of this year, and it would allow shipping up to 40 bcf of gas over a two year period.
ConocoPhillips has been selling off other pieces of its Cook Inlet portfolio, including the Beluga River gas field and the North Cook Inlet field, in favor of investment in its CD5 field in the remote National Petroleum Reserve-Alaska.
ConocoPhillips has also exited the $45 billion Alaska LNG project, along with partners BP and ExxonMobil. The massive proposal would have piped nearly a trillion cubic feet of gas from the North Slope each year for liquefaction at Nikiski – the same location as Kenai LNG – then shipped it to customers in the Asia Pacific.
However, LNG prices in the Pacific Basin have fallen sharply since Alaska LNG was first proposed, and consultants Wood Mackenzie recently concluded that Alaska LNG was "one of the least competitive" LNG projects worldwide – at least, assuming the typical ROI for oil majors. The State of Alaska is looking to move the project forward on its own by soliciting third party investment at a lower interest rate.