The Houston-based global exploration and production company
) has been requested by the state of Alaska to reopen its
abandoned Kenai Peninsula liquefied natural gas (LNG) plant.
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The revival of the plant is likely to encourage other petroleum
companies to explore and invest in Cook Inlet, which borders
Early this month, the Texas-based company received a letter from
the acting Natural Resources Commissioner inviting it to apply
for a three-year federal LNG export license for the plant at
Nikiski, around 70 miles southwest of Anchorage.
However, the request relating to an extension of its export
license was turned down by ConocoPhillips in March. The company
said that it would mull over seeking a new license if local gas
market needs were met and provided there was adequate gas to
Per the acting Natural Resources Commissioner, the local utility
demands are well supported through current contracts till 2018,
but concerns over future exploration exist. Given the dearth of
market opportunities for gas discoveries, companies lack the
motivation to invest in continued exploration activities.
The Cook Inlet is estimated to hold trillions of cubic feet of
gas, according to the U.S. Geological Survey. ConocoPhillips
along with other interested parties is pondering over evaluating
the basin to find out the feasibility of resuming LNG export
The acting Natural Resources Commissioner has also asked
ConocoPhillips to set up equipment that could be used to carry
LNG throughout Alaska. The plant could back up plans for
supplying North Slope natural gas to Fairbanks and other interior
ConocoPhillips carries a Zacks Rank #3 (Hold). However, Zacks
Ranked #1 (Strong Buy) stocks -
China Petroleum & Chemical Corp.
SM Energy Company
Range Resources Corp.
) - are good buying options for the short term.