Anchorage (Platts)--4Jun2008

The US Department of Energy has extended a federal permit by two years to
continue to allow exports of liquefied natural gas from the sole US LNG export
facility near Kenai, Alaska.

The plant, owned by ConocoPhillips' Alaska Natural Gas Corp. and Marathon
Oil, has operated since 1969, but its export permit was to expire in March,
2009. The two companies filed for the extension in January 2007.

DOE's order, announced Wednesday, gives the companies permission to
export up to 99 trillion Btu of LNG -- the equivalent of 98.1 Bcf of natural
gas -- to Japan and other countries from April 1, 2009 through March 31, 2011,
according to a DOE press release.

Approval of the permit by the DOE triggers a deal between the two
companies and Alaska's state government to increase local gas supply,
especially to utilities, and encourage development in exchange for the state's
support of the extension.

"In these times of economic uncertainty, this is great news for the state
and its residents," Alaska Governor Sarah Palin said in a statement.

The companies will drill for more gas in southcentral Alaska's producing
fields, where reserves are being depleted, supply gas to local utilities and
buy gas supplies for the LNG plant from other companies exploring in the
region. Marathon and ConocoPhillips also agreed to sell Cook Inlet seismic and
well data to third parties under the deal with the state.

ConocoPhillips said Thursday it has started drilling on new gas
development wells intended to add to reserves in the region. Marathon also
plans new drilling in the Kenai and Ninilchik gas fields on the Kenai
Peninsula, where it is operator.

The Kenai LNG facility employs 58 people and supports about 128 other
jobs in the local area. Operations of the plant contributes about $50 million
annually in royalties and taxes to the state and local economies.