Harvest Alaska, which holds 49% ownership of the Trans-Alaska Pipeline System, announced Thursday that it has entered an agreement with Marathon Petroleum Corporation and Chugach Electric Association to acquire and redevelop the Kenai LNG Terminal to receive imported liquefied natural gas.
According to a release from Harvest, the project is expected to “repurpose existing assets to enable the timely delivery of additional natural gas supplies to the Southcentral market as early as 2026,” before “full-scale” operations in 2028.
Harvest did not respond, and Marathon declined to respond, when asked how much the project might cost, who will fund the development or what the timeline would be to enter operations by next year.
The proposed project would have Harvest own, develop and operate the LNG terminal and other infrastructure, allowing Chugach, Marathon “and any other Railbelt customers to secure additional natural gas supplies.”
Utilities on the Kenai Peninsula and elsewhere on Alaska’s Railbelt have been working to identify additional sources of natural gas ahead of a projected shortfall in supply as soon as 2027.
The existing infrastructure of the LNG export terminal in Nikiski, the release says, already holds key permits from the Federal Energy Regulatory Commission and so is well positioned to meet “near-term energy needs while longer-term alternatives are developed.”
Harvest Alaska is an Anchorage-based affiliate of Harvest Midstream, according to the release. Harvest Midstream is a privately held company that shares its founder and former CEO with Hilcorp Energy Corporation. The release says that Harvest Midstream operates gathering, storage, transportation and treatment of both crude oil and natural gas “across the Lower 48 and Alaska.”
“We are pleased to have a potential solution to meet the gas needs of our members and at the right time,” says Chugach CEO, Arthur Miller, in the release. “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. 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.”
Bruce Jackman, vice president of Marathon’s Kenai Refinery, similarly says in the release that his operation is “excited” about the possible supply of natural gas.
“We believe the Kenai LNG terminal offers the quickest and lowest-cost solution to bring additional natural gas to Southcentral Alaska and beyond,” he said.
Chugach Senior Manager of Corporate Communications Julie Hasquet said in a phone call Thursday that her company is “just an interested customer who needs gas by 2028.” Harvest’s, she said, was the first proposal that meets their need for natural gas.
Trish Baker, Chugach senior manager of government affairs, also discussed the project during a Thursday meeting of the Alaska Legislature’s House Energy Special Committee in Juneau. She said Harvest’s announcement was a “potential solution for the gas supply issue,” significant especially because the terminal is expected to come online before Chugach’s contract with Hilcorp for natural gas supply expires in March 2028.
“This project is a really important piece of our gas supply need,” she said. “We would have gas under contract from the global market.”
Harvest will, Baker said, be “footing the bill” for the front-end engineering and design of the import terminal development, also reaching out to other utilities to gauge their interest in imported gas.
Other utilities who were present for the committee meeting, including Homer Electric Association — who last month said that fuel availability is the “single biggest challenge impacting Alaska utilities today” — declined to comment on the project Thursday.
Harvest’s proposal to develop an LNG import terminal in Nikiski is the second to be announced this year.
ENSTAR Natural Gas in January said it had entered an “exclusive agreement” with New York-based Glenfarne Group to develop an LNG import terminal in the facilities that Glenfarne is considering developing for the Alaska LNG Project, for which it has also entered into an agreement with the Alaska Gasline Development Corporation.
ENSTAR has a pending request to the Regulatory Commission of Alaska to pass on some of the cost of that development to its users through a gas cost adjustment surcharge.
Reach reporter Jake Dye at jacob.dye@peninsulaclarion.com.
