April 19, 2011

While the Kenai LNG Plant owners’ long-term contract with buyer Tokyo Electric/Tokyo Gas expired in March, short-term LNG market needs have changed. The plant owners, ConocoPhillips and Marathon Oil, recently agreed to terms to supply four additional LNG cargos – one to China and three to Japan.

ConocoPhillips announced Feb. 10 that the company would cease LNG exports from the Kenai LNG Plant and begin mothballing the facility as early as April. With the additional cargos, the plant is currently scheduled to operate through early August.

The long-term plans to mothball the plant are unaffected by these additional LNG cargos, due to the long-term Cook Inlet gas supply situation.

ConocoPhillips will continue to honor its gas supply contracts with local utilities. Additionally, we will be working with the utilities and other potential stakeholders to evaluate opportunities to supply additional natural gas to local markets and manage seasonal gas demands.

The plant has been operating for 42 years. It is owned, directly or indirectly, 70 percent by ConocoPhillips Alaska Natural Gas Company and 30 percent by Marathon Oil Company.

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