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DOE OKs FTA Exports From Alaska's Kenai Terminal

The U.S. Department of Energy (DOE) has granted ConocoPhillips Alaska Natural Gas Corp. (CPANGC) authorization to export liquefied natural gas (LNG) from its facility on the Kenai Peninsula to countries that are parties to free trade agreements (FTA) with the United States.

The blanket authorization is for two years and allows for export of up to the equivalent of 40 Bcf of LNG on a cumulative basis. A CPANGC application for similar authorization to export to non-FTA countries is still pending at DOE (see Daily GPIDec. 16, 2013).

Historically, the Kenai facility, which sources natural gas from Alaska's Cook Inlet, has for decades exported LNG to Japan, which does not have an FTA with the United States. Producers have been working to grow Cook Inlet production, and a resumption of exports from Kenai is seen by some as necessary to support the economics of their efforts (see Daily GPISept. 18).

While the DOE has, by most accounts, taken its time in approving non-FTA exports of LNG, the CPANGC application is viewed differently as the Kenai facility and its operator have been longtime exporters of LNG to Japan, so the non-FTA application could enjoy quicker approval (see Daily GPIJan. 6).

Operations at the Kenai terminal were halted in 2012 due to gas supply shortages after an on-again, off-again period for exports from the plant (see Daily GPI, Aug. 21, 2012; Dec. 20, 2011; Feb. 11, 2011). The export license for the plant expired March 31 (see Daily GPI, March 7, 2013).

The CPANGC FTA export application was approved by DOE on Feb. 19, but the order was only posted to the DOE website late last week.

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