Home Fossil Energy Alaska’s LNG terminal shaking off years-long stasis with revamp to stave off gas shortages
February 7, 2025,
by
Melisa Cavcic
Three players have signed on the dotted line to enable an existing liquefied natural gas (LNG) terminal in Nikiski on Alaska’s Kenai Peninsula to change hands and be given a kiss of life through redevelopment, which will unleash new flows of natural gas to the Southcentral market, keeping looming supply shortages at bay.
Kenai LNG terminal in Alaska; Source: ConocoPhillips
Thanks to an agreement Harvest Alaska (Harvest) has struck with Marathon Petroleum Corporation (MPC) and Chugach Electric Association (Chugach), the existing Kenai LNG terminal, currently owned by a subsidiary of MPC, will be brought into Harvest’s fold.
The acquisition move is being made to bolster Southcentral Alaska’s energy supplies through the repurposing of existing assets to enable delivery of additional natural gas supplies as early as 2026, with full-scale operations beginning as early as 2028.
The proposal would enable Harvest to own, develop, and operate the LNG terminal and infrastructure, allowing Chugach, MPC, and any other Railbelt customers to secure further natural gas supplies to help meet the market demand.
The redevelopment project will leverage MPC’s legacy LNG export infrastructure to alleviate the potential short-term natural gas shortage facing Southcentral Alaska. This infrastructure, combined with existing U.S. Federal Energy and Regulatory Commission (FERC) approvals, is perceived to position the facility to meet near-term energy needs while longer-term alternatives are developed.
Jason Rebrook, Harvest’s CEO, highlighted: “Harvest has a long history of operating critical oil and gas infrastructure across the state and this announcement furthers our commitment to ensuring Alaska has the energy it needs. By repurposing Marathon’s existing LNG facility, we aim to provide certainty to the Southcentral gas market while meeting the needs of Railbelt utilities.
“We are proud to collaborate with Marathon, Chugach Electric and other Southcentral utilities to bring this project online to ensure the reliable delivery of natural gas in timely and cost-efficient manner.”
LNG terminal rejuvenation to fill the supply gap
Moreover, the facility includes existing dock infrastructure, historically capable of handling LNG vessels up to 138,000 cubic meters, or approximately 2.9 billion cubic feet of natural gas, and onsite tankage with a storage capacity of 107,000 cubic meters, which is about 2.3 billion cubic feet of natural gas.
Arthur Miller, Chugach’s CEO, underlined: “Providing our members with safe, reliable and affordable electric service is core to our values and mission. We are pleased to have a potential solution to meet the gas needs of our members and at the right time. We’ve been looking at options to fill the gap left by our expiring Hilcorp contract, which ends on March 31, 2028.
“This is a great opportunity to work with partners who have extensive experience and knowledge of gas operations in Alaska.