The biggest single user of Cook Inlet natural gas is shutting down, raising fresh concern about the future of Southcentral Alaska's main energy supply.
Due to deteriorating market conditions, the Nikiski liquefied natural gas plant will no longer export gas to Japan starting this spring, its owners announced Wednesday.
It's a historic milestone in Cook Inlet, if a disappointing one: the plant has exported gas to Japan for 41 years.
The plant's owners, Conoco Phillips and Marathon Oil, said Wednesday that despite being granted a new export license by the federal government, they were unable to renew new supply contracts with LNG customers in Japan.
The producers said they will now focus their efforts on supplying gas to the regional utilities that use Cook Inlet gas to heat homes and provide electricity.
"This is a disappointment for Cook Inlet," said John Sims, a spokesman for Enstar Natural Gas Co., the region's largest gas utility. Enstar was already short on its guaranteed gas supplies for this year -- the first time that has ever happened. The company is concerned that without the overseas customers, Cook Inlet producers will have less incentive to explore for new sources of gas.
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