Marathon Petroleum remains committed to plans to import LNG from Alaska

Marathon Petroleum Corp. continues to evaluate converting its Kenai LNG export terminal in Alaska to import supercooled fuel, a project the company said could end up being larger than originally planned to help meet local natural gas demand.

FERC approved the request of the Marathon subsidiary in 2020 to convert the Kenai terminal, which has not exported any LNG since 2015.

The company said it is evaluating strategic options for the facility, including a plan approved by federal regulators, along with a larger import terminal and a second-phase regasification. The facility is near the Kenai Marathon Refinery on Cook Inlet, about 60 miles southwest of Anchorage, which would also use imported natural gas.

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“In light of natural gas producers’ projections of large natural gas shortages in the Cook Inlet region, our Kenai LNG facility could offer a cost-effective solution to supplying long-term, affordable natural gas to the region and our Kenai refinery,” he said. Marathon’s David Heppner, senior vice president of strategy and business development.

Marathon also said other options for the second phase of the project could include strategic partnerships with other LNG transportation or natural gas distribution companies in the region.

Marathon acquired an export facility by ConocoPhillips in 2018. The export facility began operations in 1969 and was the only LNG export terminal in North America for more than 40 years.

A subsidiary of Marathon Trans-Foreland Pipeline Co. In its filing with the Federal Energy Regulatory Commission, LLC detailed plans to convert the terminal to import up to four LNG cargoes per year. Last year, FERC extended the deadline for the plant to convert to imports until the end of 2025. Currently, New England is the only region in the United States that imports LNG.

Bruce Jackman, CEO of Kenai Refinery, said the evaluation is part of a broader effort to optimize Marathon’s portfolio and improve commercial performance. He noted that the refinery is critical to the state. It is the only refinery that produces gasoline in Alaska.

“Reliable natural gas supplies are critical to refinery operations, and the Kenai LNG projects we are evaluating could contribute tremendously to our long-term success,” Jackman said.

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