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Japanese Company Scraps Small-Scale Alaska LNG Plans

Resources Energy Inc. (REI), an affiliate of Japan’s Energy Resources Inc., has abandoned a plant for a small-scale liquefied natural gas (LNG) project in Port MacKenzie in Southcentral Alaska because of global market conditions for LNG.

“Given the current market conditions and spot prices of LNG, the small scale LNG project in Port MacKenzie was not deemed economic by REI’s owner in Japan.” REI Vice President Mary Ann Pease told NGI in an email.

The company had planned to construct a one million tonne per year plant in the Matanuska-Sustina Borough around the end of the decade.

Pease said, however, that LNG from Alaska is still an attractive proposition for Japanese buyers. The now-state sponsored Alaska Gasline Development Corp. (AGDC) Alaska LNG project is the next hope.

“Alaska presents the greatest potential opportunity for Japan’s energy security. The state of Alaska/AGDC Alaska LNG project must compete with global markets and is positioned to offer the added benefits of close proximity to Japan from Alaska (only seven days), political stability here in Alaska, cold temperatures and over 200 Tcf of natural gas potential underpinned with 35 Tcf of gas produced today on the North Slope,” Pease said.

REI was formed to explore the possibility of purchasing natural gas from Alaska and to build liquefaction facilities in order to export LNG to Japan. REI plans to close its office in Anchorage by the end of the month.

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