Hopeful attitude for North Kenai LNG plant

Posted: Friday, April 16, 2010

Word last week that ConocoPhillips Alaska Inc. and Marathon Oil Co. are asking for a two-year extension of their liquefied natural gas export license for the Kenai Peninsula LNG plant sounds like some much needed good news.

The current export license expires in March 2011. But the companies say they need the extension in order to fulfill their commitments to export natural gas overseas. So far, according to the companies, less than half the export commitment - 99 billion cubic feet - has been met.

The obvious good news is that about 110 Peninsula jobs are preserved, at least for another two years.

Plus, the plant will continue to exist as a backstop supplier for Southcentral utilities when extreme cold winters drain mainstream gas supplies.

But there's more. Earlier this week, ConocoPhillips spokeswoman Natalie Lowman told the Clarion that the extension would also buy more time to determine how it will use the LNG facility after they fulfill the permit.

"Keeping the plant operating keeps it maintained for future exploration," Lowman said. "It maintains the possibility for reconfiguring the plant for other natural gas options like storage and it provides time for transition."

Those are hopeful words for the future.

Obviously, we can't expect any firm commitments. Companies don't operate by writing checks they can't guarantee will cash.

But this is the first glimmer we've seen of what ConocoPhillips' might be thinking about for the future of the LNG plant and the jobs we value there. The company is considering alternatives and wants to keep a few options open.

We can't help but see that as a hopeful sign.

In short: Extension of the LNG plant export license comes with a hint of hope for the future.

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