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ConocoPhillips puts Cook Inlet gas fields up for sale

Two aging natural gas fields in Cook Inlet that help provide power to much of Southcentral Alaska, the state’s most populous region, are up for sale, owner ConocoPhillips Alaska announced on Tuesday.

The Beluga River and North Cook Inlet fields account for nearly all of ConocoPhillips’ natural gas production in Alaska, but output has been declining for years and, according to company spokeswoman Amy Burnett, they are no longer a central part of the company’s Alaska operations.

“The company regularly reviews its assets to ensure the asset portfolio is optimized and this is an ongoing part of managing the business,” the company said in a statement.

The Houston-based company said it’s looking to focus more on its North Slope oil and gas operations, including a multibillion-dollar project that could be many years in the making to ship natural gas from the Arctic to Asia.

Its budget includes about $1.4 billion for capital projects in Alaska in 2015, down slightly from last year, but up from 2008-2012, during the global recession. Most spending will be related to work on the North Slope.

In related news, ConocoPhillips says to maintain capex for next 3 years.

Burnett said it’s too soon to know whether the Cook Inlet natural gas workforce will be transferred to what’s known as the Alaska LNG project, which would bring natural gas via an 800-mile pipeline from the North Slope to a proposed liquefaction plant and export facility along Cook Inlet.

Production at North Cook Inlet peaked in 1996 at 177 million cubic feet per day, while Beluga River’s heyday came in 2003 at 171 mcf per day, a total that was shared among multiple owners.

As of 2014, the two fields produced 42 mcf of natural gas per day for ConocoPhillips. About 22 mcf came from North Cook Inlet, which is fully owned and operated by ConocoPhillips. The rest was the company’s one-third share from Beluga River. Anchorage utility Municipal Light & Power and Houston-based Hilcorp each own one-third of Beluga River as well.

The company plans to retain ownership of its other Cook Inlet property, a liquefied natural gas export facility in Nikiski that, except for a year-long hiatus starting in 2013 due to low availability of supply, has been shipping LNG to Japan since 1969.

ConocoPhillips’ federal authorization to export LNG from the facility expires in April 2016 and the company is considering whether to apply for a new authorization, Burnett said.

This article was written by Jeannette Lee Falsey from Alaska Dispatch News, Anchorage and was legally licensed through the NewsCred publisher network.

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