By Dave Donaldson
Conoco Phillips is asking for federal permission to continue exporting liquefied natural gas from its Cook Inlet facility. The announcement came from Dan Clark, the Cook Inlet asset manager for Conoco-Phillips. He said the request was made to Governor Parnell and to the U-S Department of Energy, telling the Senate Resources Committee that continuing to export would assure consistent local supply – at least until gas storage facilities are available in Cook Inlet. He referred to it as a balance to the seasonal demand fluctuations.
If there was no market like this export market, wells would shut in. Wells would physically have to be shut in. That would lead to water influx and other failures in the well. So even though gas is physically leaving the state, it allows that production to continue at a high deliverability so when it’s needed it can be diverted.
The plant near Nikiski pays some sixty million dollars in royalty and taxes to the state as a result of its production. Clark said that two years ago, the state required the company to drill two new wells to cover the expected needs. He said Conoco-Phillips drilled six wells — of which five are now in production.
Clark also said that the company was not asking for any incentives to continue production in the area. He said market size is more important – and the export license will help provide that.
The legislature does not need to take further action on the request.