Anchorage-Governor Sarah Palin (R) has announced an agreement between the state and oil industry officials relating to LNG exports and further natural gas exploration on the Cook Inlet. Palin says the state will support a two-year extension of the federal export license for the LNG plant on Kenai Peninsula. Plant owners Marathon Oil Corp. and ConocoPhillips filed for an extension last January. The present export license expires in 2009. The owners have agreed that adequate supplies of gas will be available for local utilities. The agreement also requires the plant owners to develop additional natural gas reserves in Cook Inlet and allow third parties the opportunity to monetize their gas production through the LNG plant. In addition, the two companies have agreed to sell Cook Inlet seismic and well data to third parties. Gov. Palin’s agreement is not the final word on the issue, according to an Agrium spokesperson, who said Agrium has opposed the LNG export extension. The spokesperson said that it is up to DOE to decide if it is best to export the gas or keep it in the U.S. to support domestic jobs. To date, the gas has been going to Japan. The U.S. Department of Energy is expected to make a final decision on the export extension this spring. The state, along with Agrium, an electric utility, a gas distributor, and another oil company, reportedly all opposed the initial request for the two-year extension. The new agreement effectively takes most of the opposition away except for Agrium. Agrium idled its Kenai, Alaska, nitrogen plant late last year due to a shortage of gas. It is now focused on developing a coal gasification plant that could return its nitrogen plant to production. More word on whether it will proceed with coal gas is expected in the first half of 2008.
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