The Natural Gas Supply Co., a cooperative of three Alaska utilities companies – Matanuska Electric, Homer Electric and Golden Valley Electric – and supported by the Alaska Natural Gas Development Authority (ANGDA) as well as the state’s largest electric utility, Chugach Electric Association, has offered to purchase the Kenai liquefied natural gas (LNG) plant from ConocoPhillips and Marathon Oil Co.

The plant has exported LNG to Japan for the past 40 years, but the export license is set to expire in March 2011, and a renewal application has not been submitted by the facility’s owners. The plant also provides the four utilities with necessary mid-winter supplies.

Officials with ANGDA, a state-owned organization focused on getting North Slope natural gas to Alaskan communities as well as identifying feasible LNG opportunities for the state of Alaska, said the organization, Chugach Electric and the cooperative members are worried that should the owners fail to renew their export license, they may close the plant.

The interested parties would seek to utilize the plant as a peaking facility for communities in the south-central section of the state as well as add loading and barge facilities to ship supplies to communities along the state’s coasts and replace diesel fuel as a power supply.

ANGDA’s chief executive officer, Harold Heinze, told a state legislative committee that the cooperative and ANGDA may also seek to invest in LNG regasification facilities to help ensure these supplies to local utilities, according to the Alaska Journal of Commerce.

Should an agreement be reached between the interested parties, then revenue bonds would be issued by ANGDA to help fund the purchase. ANGDA officials said should the plant close; it would threaten natural gas production in the state. – Frank Nieto