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Harvest Alaska said on Thursday it has signed a deal with Marathon Petroleum (MPC) and Chugach Electric Association to bolster Southcentral Alaska’s energy supplies through Harvest’s acquisition and re-development of the existing Kenai LNG terminal, currently owned by MPC’s Trans-Foreland Pipeline.
The project is designed to repurpose existing assets to enable the timely delivery of additional natural gas supplies to the Southcentral market as early as 2026, with full-scale operations beginning as early as 2028, according to Harvest.
Under the proposal, Harvest would own, develop, and operate the LNG terminal and infrastructure – allowing Chugach, MPC, and any other Railbelt customers to secure additional natural gas supplies to help meet the market demand, the firm said.
Back in August 2022, MPC’s Trans-Foreland Pipeline won more time from US regulators to bring the closed Kenai LNG export plant in Alaska back online as an import facility.
The US Federal Energy Regulatory Commission (FERC) granted an extension of time until and including December 17, 2025 to complete and place into service the project.
FERC authorized Trans-Foreland on December 17, 2020 to launch the LNG import facility in two years.
Moreover, Trans-Foreland plans to construct, modify, and operate new facilities for the import of LNG at its existing Kenai LNG export terminal in Nikiski, Kenai Peninsula Borough, and deliver the fuel to its Kenai refinery adjacent to the plant.
The Kenai LNG cool-down project would allow the plant to provide up to 7 million standard cubic feet per day of gas.
Potential short-term natural gas shortage facing Southcentral Alaska.
Harvest said the project leverages MPC’s legacy LNG export infrastructure to alleviate the potential short-term natural gas shortage facing Southcentral Alaska.
The facility includes existing dock infrastructure, which was historically capable of handling LNG vessels up to 138,000 cubic meters (approximately 2.9 billion cubic feet of natural gas), as well as onsite tankage with a storage capacity of 107,000 cubic meters (approximately 2.3 billion cubic feet of natural gas).
This infrastructure, combined with existing FERC approvals, positions the facility to meet near-term energy needs while longer-term alternatives are developed, Harvest said.
“By repurposing Marathon’s existing LNG facility, we aim to provide certainty to the Southcentral gas market while meeting the needs of Railbelt utilities,” Harvest CEO Jason Rebrook said.
Chugach is in discussions with Harvest to utilize the Kenai LNG facility and to have a potential solution to meet the gas needs of its members.
“We’ve been looking at options to fill the gap left by our expiring Hilcorp contract, which ends on March 31, 2028,” Chugach CEO Arthur Miller said.
“We look forward to ongoing discussions and analysis with Harvest Alaska as they progress the front-end engineering and design study over the next several months,” he said.
Moreover, Bruce Jackman, vice president of MPC’s Kenai refinery said the company believes the Kenai LNG terminal offers the “quickest and lowest-cost solution” to bring additional natural gas to Southcentral Alaska and beyond.
“Our Kenai refinery employees work around the clock to provide gasoline, diesel, and jet fuel to their fellow Alaskans, and a reliable supply of natural gas is critical to the refinery’s operations,” he said.