ConocoPhillips will likely have to shut in gas wells in its Beluga and and North Cook Inlet fields this summer since it won't need the gas for export to Japan, a company official told a legislative committee on Tuesday.

Dan Clark, manager of Cook Inlet assets for ConocoPhillips, appeared at the request of the House Economic Development Committee, which wanted to talk about the company's announcement last week that it would close its Nikiski liquefied natural gas plant as soon as April.

The plant has been operating for 40 years, exporting LNG to Tokyo Electric and Tokyo Gas in Japan.

ConocoPhillips, which owns the facility with Marathon Oil, had recently received a new export license from the federal government to continue shipments through 2013. But company officials said a glut of LNG on the Asian market had made continued shipments economically unviable. They decided to mothball the plant, but, as Clark said Tuesday, keep it in good shape so it can be reopened either for exports again or perhaps retrofitted as a facility that could import LNG.

Shutting in wells at the two fields will be necessary because the gas isn't needed in the summer, Clark said. But next winter, when Southcentral Alaska generally uses all the gas it can get to keep homes heated and lights on, it may not be easy or even possible to restart the wells because of their age and other condition, he said.

The fields have been in production for more than 40 years and the company will make every effort to shut down the wells in a way that will be the least damaging.

"There is a risk that when you want to turn it back on it may not be there," Clark said.

Lawmakers were interested in trying to figure out how it go to this point -- that a major economic driver for the Kenai Peninsula could be shut down with little warning.

Political leaders including House Speaker Mike Chenault who lives a short distance from the Nikiski plant were caught off guard last week when they learned the plant would be closing. Chenault was not at Tuesday's hearing but sent a videotaped statement that the committee played at the start of the hearing.

Rep. Kurt Olson, a Soldotna Republican, ticked off a number of factors that led up to the closing, including the fact that ConocoPhillips was denied a 10-year export license several years ago which would have run through 2016.

Clark, however, couldn't say that the 10-year license would have made a difference. It was simply the market conditions that led to the company's decision to quit shipping to Japan, he said.

Olson also noted that on top of the "worldwide glut" of LNG and other gas supplies like shale gas, exploration companies have not been looking for gas in Cook Inlet because there has been no market here until recently. He blamed state regulatory agencies for being slow to approve contracts.

In answer to a question from committee chair Rep. Bob Herron, a Bethel Democrat, Clark acknowledged that it could cost "hundreds of millions of dollars" to restart the Nikiski facility, depending on what it was being used for. "Certainly another long-term export scenario would require significant investment," he said.

Committee members wanted to know if state taxes on the companies were a factor in the closure but Clark said taxes on Cook Inlet production are "very low."

Contact Patti Epler at patti(at)alaskadispatch.com