ConocoPhillips plans full shut-down of export plant on Kenai Peninsula for lack of a buyer

Monday, 17 July 2017

ConocoPhillips said it was preparing to put the plant into long-term shutdown mode in the autumn.

“The reduced operations will focus on continued preservation of the facilities for future LNG exports,” the company said.

“How long the plant is mothballed will depend on market conditions and right now there are about 30 people working at the LNG plant, 18 of whom are ConocoPhillips employees,” it added.

The location had always been favoured by the new and larger Alaska LNG project and the purchase of the plant would give the venture a brownfield site to build on.

ConocoPhillips said in November 2016 it planned to sell the Kenai facility, which was the first US liquefaction and export plant to come on stream in 1969 and went on to export cargoes to Japan for 46 years.

Kenai LNG had been given a short reprieve after shutting down in 2013 and during 2014 and 2015 exported about 10 cargoes to Japan, mostly on a spot basis to Japanese utilities.

LNG from Kenai had previously been shipped under long-term contract to Tokyo Electric Power Co. and Tokyo Gas, though operations were gradually cut back at the ageing plant where the capacity is less than 900,000 tonnes per annum.

The volumes delivered from the two-Train Kenai plant were small compared with the eventual 27 million tonnes per annum for the first US Gulf Coast LNG export plant to come on stream, Sabine Pass in Louisiana.

The AGDC-led Alaska LNG project itself is planning to produce an initial 20 MTPA of LNG from its four planned processing Trains.

The original investors in the Kenai plant were Marathon Oil and the predecessor company of ConocoPhillips.

Its start-up in 1969 came four years after the first full-scale LNG export plant began commercial operations at Arzew in Algeria.