ConocoPhillips to resume LNG exports in 2012

Buccaneer Energy announces natural gas sale contract

New natural gas contracts will allow ConocoPhillips’ liquified natural gas plant in Nikiski to resume exports next year, a company spokesperson said Thursday.

“We expect about four cargos in the second half of the year,” said ConocoPhillips spokesperson Natalie Lowman.

Independent oil and gas company Buccaneer Energy announced Thursday that it had a gas sales contract with ConocoPhillips beginning this month. The sale will cease once the Cook Inlet Natural Gas Storage Alaska facility comes online. Buccaneer has an agreement to sell gas to Enstar once it can inject it into the storage facility.

Kenai Peninsula Borough Mayor Mike Navarre said keeping the facility running was good news. The company and its employees are both assets to the community, he said.

“I think that it’s great for the borough because it means we’ll keep those jobs and the economic activity,” he said.

Lowman said that ConocoPhillips has enough new gas contracts to resume LNG exports in mid-2012. She said the details of those contracts, including who is providing the gas, are confidential.

The facility will remain in its winterization mode until exports resume in the middle of next year. There are currently about 40 to 50 employees working at the plant, Lowman said. At this time, no employment changes are planned.

Lowman said her company has arranged for a tanker to export LNG, but is still negotiating with a buyer for the LNG.

“Those agreements are still being worked out and are confidential right now,” Lowman said.

Buccaneer’s gas will come from its Kenai Loop #1 well, near WalMart in Kenai. More wells are planned in the Kenai Loop development for 2012.

Buccaneer spokesman Dean Gallegos said the sales will help his company financially, and act as a sort of test-run for production before the Enstar contract begins.

“This gas sales contract with ConocoPhillips is another milestone for Buccaneer,” Gallegos said in a statement. “With secured contracts for the gas produced at Kenai Loop #1 from the time of first production, and the flexibility to be able to sell into the peak demand daily auction market, places Buccaneer in a strong position with substantial cash flows from December 2011 rather than April 2012.”

Molly Dischner can be reached at molly.dischner@peninsulaclarion.com.

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