(The Center Square) – Federal regulators have approved an Alaska company’s request for three more years to change an existing LNG export terminal into one that instead receives gas imported for use within the state.
The Federal Energy Regulatory Commission last week approved Trans-Foreland Pipeline Company LLC’s request for an extension to convert a dormant LNG export terminal in Nikiski on the Kenai Peninsula to an import facility, a regulatory filing shows. The facility would supply gas to electric utilities in the south central part of Alaska, according to the filing.
The Kenai plant, the first-ever LNG export terminal in North America, entered service in 1969 and was operational until 2015. Before it was idled, the facility exported liquified natural gas produced at gas fields in Alaska’s Cook Inlet, which are becoming depleted.
“In January 2023, the Alaska Department of Natural Resources published a study demonstrating that natural gas demand is projected to exceed supply beginning in 2027, with the gap widening significantly over time,” the Federal Energy Regulatory Commission said in the filing.
The Commission initially authorized a plan to convert the LNG facility from export to import in December 2020. The regulator required that the conversion work be completed by December 2022, but then-owner Marathon Petroleum obtained a three-year extension shortly before the deadline.
Marathon sold its interest in the Kenai facility in November to Hilcorp Energy, a Houston-based company that is the biggest supplier in Alaska’s gas market.
Hilcorp, which produces most Cook Inlet gas, has said it cannot guarantee that future supplies will be at current levels. Three years ago, Hilcorp told Alaska’s two largest electric cooperatives they would need to find gas elsewhere by March 2028, when current supply agreements are set to expire.
Harvest Alaska, a subsidiary of Hilcorp that would operate the Kenai LNG import terminal, said existing storage tanks and associated facilities could provide up to 7 million standard cubic feet per day of gas for use in power generation.
Harvest says it is in “advanced talks” with global LNG suppliers. The company is targeting a final investment decision in the second quarter of 2026 and anticipates LNG imports could begin in the first half of 2028.
The plan to convert the Kenai facility to receive LNG could cost $500 million or more, according to utility studies and Alaska officials, the Anchorage Daily News reported.
Glenfarne Energy wants to build a separate, competing LNG import facility in Nikiski on the Kenai Peninsula that would later be converted to export gas.
New York and Houston-based Glenfarne is concurrently planning the Alaska LNG project, which includes construction of an 800-mile pipeline to move gas from the North Slope southward to Alaskan communities and to a future LNG export terminal.
When the pipeline across the North Slope is completed, Glenfarne and its project partners plan to build a new import terminal in Nikiski intentionally designed to be the first stage of the larger Alaska LNG export terminal.
In January, the state-owned Alaska Gasline Development Corporation sold a 75% interest in Alaska LNG to Glenfarne for an undisclosed amount.
