Nikiski LNG Plant May Reopen Soon

The ConocoPhillips LNG plant in Nikiski may be re-opening soon, thanks to a boost from the federal government. The Department of Energy announced Monday that it has approved a request from the company to resume LNG exports to Japan.

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For 47 years, the Liquified Natural Gas plant in Nikiski sent gas exports to Japan, until a shortage of gas in the Cook Inlet basin – and the expiration of its license – forced Conoco Phillips to shutter the plant a year ago.

Now, the company says it’s getting back in the export game. In a news release, Spokesperson Natalie Lowman said Conoco Phillips plans to reopen that plant later this Spring and resume LNG exports on “a seasonal basis” over the summer for the next two years.

The announcement comes on the heels of the Federal Department of Energy giving the OK for Conoco to export to countries that are not part of a free trade agreement with the United States, including Japan. In February, the department approved an application for the company to ship to Free Trade Agreement countries, such as South Korea.

ConocoPhillips made their application Dec. 11. In the application materials, the company had to prove it could meet local demand for at least two years. In support of that, the Department of Energy used a 2011 study by Alaska Department of Natural Resources that estimated there are approximately 1,500 Bcf of natural gas reserves in existing fields in Cook Inlet and that “the Cook Inlet basin is capable of supplying regional natural gas needs through 2018-20, and possibly longer.”

Senator Mark Begich called Monday’s announcement “great news for the cradle of Alaska’s oil and gas industry on the Kenai Peninsula.” Begich says the recent boom in gas exploration in and around Cook Inlet is spurring “the kind of job growth responsible oil and gas development can provide.”

In its application to the Department of Energy, ConocoPhillips said the LNG facility, when operating, employs approximately 50 people directly and 128 people indirectly, generating an estimated $13.4 million in personal income and an economic benefit of $20.1 million per year to the state and local economy.

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