Page 18 - NorthAmOil Week 01 2021

NorthAmOil POLICY NorthAmOil

Trump administration’s Arctic

lease auction draws little interest

ALASKA A federal auction of oil leases in the Arctic to $20mn on ANWR leases owing to concerns
National Wildlife Refuge (ANWR) in Alaska about a lack of participation in the sale.
this week drew limited interest from producers. The sale was held on January 6, roughly two
The Alaska Industrial Development and weeks before Trump leaves office. His successor,
Export Authority (AIDEA), a state agency, was President-elect Joe Biden, has pledged to per-
the sole bidder on at least eight of 12 tracts that manently protect the ANWR from new drilling.
received bids. A total of 22 tracts were offered, However, Bloomberg noted that it would be dif-
and 16 bids were received on the 12 tracts. Three ficult – if not impossible – for his administration
of the 16 bids were described as “incomplete” by to cancel formally issued oil leases, which con-
US Department of Interior (DoI) Secretary Kate tributed to the Trump government’s last-minute
MacGregor, according to Reuters. push to hold the auction.
The lack of interest is not surprising, given Nonetheless, it has been reported that the
that low oil prices have acted as a deterrent to leases do not authorise any ground-disturbing
new exploration for the past few years, espe- activity and that subsequent permits would be
cially in challenging regions such as the Arctic, needed to conduct seismic surveys or begin
where costs are likely to be higher. Nonetheless, drilling. This suggests that moving forward with
it comes as a blow to Alaska and the administra- development could yet prove more challenging
tion of outgoing US President Donald Trump, under Biden, and could have played a part in the
both of which have been pushing to open up limited interest oil companies showed in the sale.
the ANWR to oil and gas development. Indeed, Nonetheless, the AIDEA has said it intends
the AIDEA held an emergency meeting in late to partner with private companies to develop
December at which it authorised spending up its leases.™

PROJECTS & COMPANIES

US regulators approve request to

convert Kenai LNG plant to imports

ALASKA THE US Federal Energy Regulatory Commis- its boil-off gas management system to deliver
sion (FERC) approved a proposal in the second imported gas to the adjacent Kenai refinery.
half of December to convert the mothballed The FERC has given the company two years to
Kenai LNG export facility in Alaska to imports put the project into service. Trans-Foreland had
on a limited basis. initially hoped to import its first LNG cargo in
The plan is being proposed by Trans-Fore- August 2020, but some delays were encountered
land Pipeline, a unit of Marathon Petroleum, during the regulatory approval process.
which acquired the LNG facility in Nikiski, The conversion project is notable because it
on the Kenai Peninsula, when it took over comes as other developers in the US are building
Andeavor in October 2018. Andeavor, in turn, liquefaction and export capacity – primarily on
had acquired the plant from ConocoPhillips, the Gulf Coast, but there are also two propos-
which mothballed the facility in 2015. als to build new LNG export facilities in Alaska.
Prior to this, Kenai LNG had been the sole Indeed, a number of developers have already
facility exporting the super-chilled fuel from the converted existing LNG import facilities in the
US, before the liquefaction boom began on the Lower 48 states to exports, or are in the process
Gulf Coast in 2016. Nearly all of the LNG from of doing so.
Kenai, which operated from 1969 until 2015, was Marathon said last year that it was still devel-
sold to Japan. oping full-scale plans for Kenai LNG, but wanted
Trans-Foreland is proposing to import up to use the plant to “optimise” its Kenai refinery
to four tankers’ worth of LNG per year and use operations in the meantime.™

P18 www. NEWSBASE .com Week 01 07•January•2021