ConocoPhillips wants to sell Alaskan Kenai LNG plant
The Houston-based company did not disclose details or potential asking price.
Kenai, which has capacity of 1.5mn t/yr, equivalent to 200mn cf/d (5.7mn m?/d) of gas, is among the oldest LNG export terminals in the world. The facility came on line in 1969 to serve the relatively close Japanese market.
The sale is likely another indication that an oversupplied market and low oil prices are squeezing the economics of LNG exports. Most Asian long-term LNG contracts are linked to oil prices, as consuming countries in that region do not have liquid gas markets.
Argus today assessed the spot price for LNG delivered to northeast Asia at \\$7.32/mmBtu, compared with \\$7.63/mmBtu at the same time in 2015, \\$10.22/mmBtu in 2014 and \\$18.85/mmBtu in 2013. Oil prices started to plummet in mid-2014.
ConocoPhillips in August said that because of low prices in Asia it would not export any cargoes this year from Kenai, located in Nikiski on the state's south-central coast. The facility has not been mothballed and is ready to resume exports, ConocoPhillips said.
The company is in the early stages of marketing the terminal and plans to open a data room in January that will be open by appointment.
ConocoPhillips plans to focus its Alaska operations on developing its resources in the North Slope, but for now that does not include LNG.
"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. "Our current focus is on our North Slope operations. We believe the plant is a strategic asset that offers good opportunities for the right buyer.
Kenai LNG was mothballed in March 2013 because of uncertainty over whether the Cook Inlet had enough gas to meet local and export demand.
Alaska regulators in September 2013 asked ConocoPhillips to resume Kenai exports to provide more markets for growing Cook Inlet gas production. The facility came back on line in 2014 and exported five cargoes that year to Japan with a combined volume of 13.3 Bcf of gas, at a volume-weighted average delivered price of \\$15.59/mmBtu, according to the US Department of Energy.
It exported six cargoes in 2015 to Japan and Taiwan with a combined volume equivalent to 16.5 Bcf of gas, at a volume-weighted average delivered of price of \\$7.42/mmBtu, less than half of the price the year before.
Kenai is ConocoPhillips' only remaining operating asset in the Cook Inlet, after the company earlier this year the company finalized the sales of the Beluga river unit and the North Cook Inlet unit.
ConocoPhillips is among three North Slope asset holders that were developing the massive Alaska LNG project that would have included an 800-mile (1,287km) pipeline to send stranded North Slope gas to a planned new large liquefaction terminal in the Nikiski area.
ConocoPhillips, along with ExxonMobil and BP, pulled out of the \\$45bn-\\$65bn project in September because of low oil prices and competition from cheaper LNG projects in the contiguous US, leaving it up the state to try to market the project. If the state secures long-term LNG customers, the three asset holders would sell gas to Alaska LNG.