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ConocoPhillips' Alaska LNG Export Request Won't Face Long Delay

The U.S. Department of Energy (DOE) will process a request by a ConocoPhillips subsidiary to resume liquefied natural gas (LNG) exports from Alaska, but it’s not likely the company will have to go to the end of a long queue seeking regulatory approval.

Last month, ConocoPhillips Alaska Natural Gas Corp. (COPA) submitted two applications to the DOE for authorization to export up to 40 Bcf of LNG over a two-year period from its facility in Kenai, AK, located in the Cook Inlet (see Daily GPI, Dec. 16, 2013).

The plant, which had been exporting LNG since 1969 had been headed for mothball status, but was recently revived along with renewed drilling in the Cook Inlet area (see Daily GPI, Sept. 18, 2013) .

Since COPA's application is short-term and involves a facility that already has been in operation, it is not likely it would not be added to a long queue of projects seeking to build new facilities with 15 and 20-year authorizations.

Under the amended Natural Gas Act of 1938, the DOE has two types of authorizations -- blanket and long-term -- for importing or exporting natural gas, including LNG. Blanket authorization allows a company to import or export, on a short-term or spot market basis, for up to two years; long-term authorizations are for more than two years.

COPA's first application [No. 13-154] is for permission to export LNG to countries with a free trade agreement (FTA) with the United States. A second application [No. 13-155] would be to export LNG to non-FTA countries. Both forms of exports would be by ship.

Amy Jennings Burnett, spokeswoman for COPA, said the DOE's website had erroneously listed Canada and Mexico as the destination for LNG exports, and that the company had fielded several media inquiries over the listings. DOE officials could not be reached for comment Monday.

"The license applications don't specify where LNG will be exported to," Burnett said Monday, adding that even if COPA was awarded permission to export to both FTA and non-FTA countries, the company would still not exceed 40 Bcf over the two years.

"Our contract negotiations are confidential, and we aren't specifying specifically where we might export to at this point."

DOE rules stipulate that applicant companies may not have more than two concurrent blanket authorizations with the same requested authorities, such as two export licenses.

The DOE established an order of precedence for applications to export LNG to non-FTA countries on Dec. 5, 2012. Applicants that received prior approval from FERC either on or before that date were placed at the top of the list, followed by those with pending DOE applications but who didn't receive approval from the Federal Energy Regulatory Commission by that date. All other applicants follow, but applicants among all three criteria are sorted in chronological order based on when the DOE received their applications.

So far, the DOE has approved four requests to export LNG to non-FTA countries. The agency's latest move was to grant Freeport LNG Expansion LP and FLNG Liquefaction LLC permission to export up to 1.8 Bcf/d (see Daily GPI, Nov. 15, 2013). Six months earlier, the companies were given permission to export 1.4 Bcf/d (see Daily GPI, May 20, 2013).

Last September, Dominion was conditionally authorized to export up to 0.77 Bcf/d for 20 years from its Cove Point LNG Terminal in Calvert County, MD (see Daily GPI, Sept. 12, 2013). One month earlier, Lake Charles Exports LLC was given permission to export up to 2 Bcf/d (see Daily GPI, Aug. 8, 2013). In 2011, Cheniere Energy Partners LP's Sabine Pass Liquefaction LLC received permission to export up to 2.2 Bcf/d (see Daily GPI, May 23, 2011).

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