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Energy

ConocoPhillips looking to sell Kenai LNG plant

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  • Updated: November 17, 2016
  • Published November 17, 2016

ConocoPhillips said Thursday it's in the "initial stages" of trying to sell its plant on the Kenai Peninsula that for nearly 50 years liquefied natural gas from Cook Inlet for export to overseas markets.

The company, adjusting to low oil and LNG prices that have battered the industry, cited "market conditions" in a statement issued Thursday. It also said it is focused on its North Slope operations where it has broken new ground on the western edge of the state's North Slope oil fields, pushing into federal territory in the National Petroleum Reserve-Alaska.

"Our efforts to market the plant are consistent with our company's efforts to regularly review our assets to ensure we are optimizing our portfolio," ConocoPhillips said in the statement.

"We believe the plant is a strategic asset that offers good opportunities for the right buyer," the Houston-based company said.

ConocoPhillips this year also sold its stake in the Beluga River Gas field in Cook Inlet in Southcentral Alaska in a $152 million deal with the municipality of Anchorage and Chugach Electric Association.

The LNG plant in Nikiski on the Kenai Peninsula began producing liquefied natural gas in 1969. For 47 years, it was the only LNG export facility in the United States and was run for years by Arco.

Cheniere Energy early this year became the second U.S. exporter of LNG, from its facility in Sabine Pass, Louisiana.

In 2015 the Kenai LNG plant operated for six months, liquefying 20 billion cubic feet of gas for delivery, ConocoPhillips said.

"Due to market conditions, ConocoPhillips did not conduct an export program in 2016," the company said. "The Kenai LNG Plant remains operational and ready to resume exports."

About 23 people are currently employed there, a spokeswoman with ConocoPhillips said.

Larry Persily, oil and gas adviser to Kenai Peninsula Borough Mayor Mike Navarre, said prices in the LNG market need to improve so exports can be resumed at the plant.

"The LNG plant has been a long-term employer and important part of the community," he said. "We hope if ConocoPhillips is able to sell it then a new owner is able to resume (exports) or if they can't that the market improves and they can resume (exports)."

"As one of the longest, continuously operating LNG plants in the world, the Kenai LNG Plant has a proud history," ConocoPhillips said. "It has served as an LNG industry role model for safe, efficient and reliable operation."

Republican Sen. Peter Micciche of Soldotna, a plant official at the Kenai LNG facility, did not immediately return phone calls for comment Thursday evening.

ConocoPhillips' marketing efforts were initially reported Thursday by Alaska Public Radio Network.

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