Marathon’s unit seeks more time for Kenai LNG import project

Marathon’s unit Trans-Foreland Pipeline asked US energy regulators for more time to bring the closed Kenai LNG export plant in Alaska back online as an import facility.

The US Federal Energy Regulatory Commission (FERC) authorized Trans-Foreland on December 17, 2020 to launch the LNG import facility in two years.

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.

However, Trans-Foreland “does not anticipate being able to place the project into service by December 17, 2022, despite good faith efforts to do so,” according to a filling with FERC dated July 7.

The firm is seeking a three-year extension of time to place the project into service by December 17, 2025.

“Uncertainty and volatility” in global LNG market

According to the filling, “the onset and duration of the Covid-19 pandemic and the war in Ukraine have generated adverse economic and logistical conditions that slowed commercial progress and precluded Trans-Foreland from making its final investment decision (FID) for the project.”

In particular, “uncertainty and volatility in the global LNG market have made it difficult” for Trans-Foreland to secure a suitable supply arrangement that would provide the financial certainty necessary for the project, it said.

Trans-Foreland said it still needs this financial certainty in order to make its FID and move forward with physical modifications to the Kenai LNG terminal.

TransForeland also said it had been actively seeking suitable suppliers and is monitoring markets for LNG.

Despite this delay, Trans-Foreland “is confident that the project continues to be commercially viable,” it said.

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