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ConocoPhillips Seeks Kenai, AK, LNG Export Reauthorization

ConocoPhillips Alaska Natural Gas Corp. (CPANGC) has filed with the U.S. Department of Energy (DOE) to extend exports of liquefied natural gas (LNG) from its terminal at Kenai, AK.

CPANGC is seeking free trade agreement (FTA) and non-FTA export authorization for up to the equivalent of 40 Bcf of LNG for a period of two years beginning Feb. 19, 2016. Its current FTA and non-FTA export authorizations are due to expire soon. The Kenai LNG facility has exported LNG for almost 50 years under multiple export authorizations over that period.

The company told DOE that it expects the volumes exported from the facility to fluctuate during the year in concert with fluctuating local demand for natural gas produced from the Cook Inlet in Southcentral Alaska.

CPANGC said area utilities have sufficient gas supplies contracted for the period during which export authorization is sought. Additionally, the company said that allowing exports helps to secure local gas supply by providing an incentive to drillers and preserving the integrity of wells by preventing shut ins during periods of low local demand.

"...[B]y providing an additional source of demand, particularly during the warmer months when domestic demand is low, the requested export authorization will also provide tangible benefits to the local community by not only preserving gas well deliverability and enhancing the current supply security of Southcentral Alaska but also by providing an economic incentive and market opportunity for continued exploration and additional gas supply development in the Cook Inlet," CPANGC told DOE.

"Rather than viewing the export and local markets as mutually exclusive, in this instance they should instead be seen as symbiotic. The continuation of LNG export activity will help ensure that regional natural gas demand will be satisfied by providing an economic incentive and market opportunity for continued exploration in the Cook Inlet."

Providing letters in support of CPANGC's application were AIX Energy, Aurora Gas, Furie Alaska Operating and WesPac Midstream.

The terminal's previous FTA and non-FTA export authorizations were granted by DOE in 2014 (see Daily GPIApril 14March 3).

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