The shuttered Kenai LNG plant in Nikiski. (Loren Holmes / ADN archive)
A Hilcorp affiliate last week filed paperwork with federal regulators to build what could become the first facility in Alaska to import liquefied natural gas to meet energy needs across much of the state.
Trans-Foreland Pipeline Company seeks to expand plans for a smaller import project that had originally received approval from the Federal Energy Regulatory Commission but had yet not been built, according to the Jan. 9 application.
The project would convert the Kenai LNG Terminal in Nikiski into an import facility to process deliveries of liquefied natural gas, or LNG, that will arrive by tanker.
The facility had long operated as an LNG export facility for decades, starting in 1969, until it was idled in 2015.
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The reversal in use highlights the shift in the Cook Inlet basin, where gas production has long dropped.
The basin was once the state’s dominant source of oil and gas, with enough gas to meet local needs and support LNG shipments to Japan.
But Hilcorp, the top gas producer in the region, told utilities in 2022 that it cannot guarantee gas supply after contracts end, including for Chugach Electric in 2028 and Enstar in 2033.
Harvest Midstream, a Hilcorp affiliate, acquired the Kenai LNG facility and Trans-Foreland from its previous owner, Marathon Petroleum, last year. The federal agency had originally authorized Trans-Foreland to build an import facility in 2020. The new filing seeks to expand those plans.
An official with Harvest Midstream declined to provide comment Friday.
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Today, production in Cook Inlet still largely meets the demand for gas in the region, the filing says.
Gas from storage reservoirs also supplement produced gas on cold winter days when demand rises.
[Southcentral Alaska utilities say cold snap hasn’t strained winter gas supply, despite longer-term challenges]
But declining production is forecast to cause a “supply deficit” starting next year, the filing says.
The application seeks approval by July 31 in order to beat that shortfall.
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The project “is narrowly tailored to address the forecasted needs of the southcentral Alaska region” and “will enhance natural gas supply reliability and security for the Southcentral region,” the filing says.
The facility could deliver up to 20 billion cubic feet of gas annually, meeting a chunk of total demand in the region.
But the supply shortfall is expected to keep growing, to a deficit of 40 billion cubic feet by the early 2030s, the filing says.
The application does not say how that deficit may be closed.
Larry Persily, an oil and gas analystand former Alaska deputy commissioner of revenue, said the Trans-Foreland facility could seek federal approval for expansion after it gets off the ground.
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“They certainly could get the authorization for 20 (billion cubic feet) and then go back to FERC in four, five, six years and say, ‘Hey, we need to increase it,’” he said. “It’s not a number that’s hard wired for all eternity. It’s just a function of how much equipment they put there.”
It’s possible another LNG import facility could be built, also in Nikiski.
Enstar, the natural gas company for Southcentral Alaska, has teamed up with Glenfarne to study the construction of what could be a second LNG import facility in Alaska.
That project would not come online until at least 2029.
The project has not yet filed for approval from the Federal Energy Regulatory Commission, Persily said.
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[Southcentral Alaska utilities move to expand gas storage, an insurance policy for severe cold and a bank for imports]
Persily said it’s increasingly likely that LNG imports may be a necessary part of the state’s future, though it’s possible more gas could be produced than expected in Cook Inlet, heading off the shortage.
Also, Glenfarne is working with the state and other companies to develop a $44 billion Alaska LNG project that could deliver natural gas to Southcentral Alaska in a first phase, if it can be built.
But the project, which proposed starting up in 2029, remains iffy.
A final investment decision on Alaska LNG has not been made, though it was expected late last year for the project’s first phase. Similar gas projects in Alaska, saddled with a costly 800-mile pipeline like Alaska LNG, have failed for decades.
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Tim Fitzpatrick, a spokesperson for Glenfarne, said in an email that front-end engineering and design for phase one of Alaska LNG was completed on schedule.
He said that “we are moving forward toward FID,” or a final investment decision.
If gas imports do begin, Persily said, it’s possible that the increased price of imported gas could be a “manageable” problem.
LNG supply has grown worldwide while Cook Inlet prices for gas are high and have been rising, he said.
Chugach Electric Association, a potential customer for gas from the Trans-Foreland facility, estimated in 2024 that ratepayer bills would rise about 10% when LNG is imported in 2028.
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“The fact that the global market seems to be entering an era of plentiful supply, at least through the early 2030s, bodes well for us,” Persily said.
And companies are pursuing additional gas storage, which can also stabilize prices, he said.
“They don’t have to buy LNG for next week’s cold spell,” he said. “You can buy it when the market is cheap and put in storage.”
[Utilities say Alaska needs an LNG import terminal. Here’s how consumers could end up paying for not one, but two.]
I never thought I’d be the person writing this letter, but after this winter, I think I might be done with Alaska. I was born here, grew up here, raised my family here, and never imagined living anywhere else. I defended Alaska to the haters. I rolled my eyes at people who retired to Arizona. I told myself long winters are worth it because summers are the best.
But this winter broke something in me. It was so long, dark, icy and relentless. By the time spring finally arrived, I felt angry that winter took so much out of me and that I spent months feeling trapped by weather, darkness and road conditions. Angry that I’m getting older and still structuring my life around surviving winters instead of enjoying my life. And at the time I’m writing this, this spring has sucked! My heat is still coming on every day. I’m still wearing my puffer jackets!
Part of me wonders if it’s not really about the winter at all. I’m divorced and my two kids are grown and doing their own thing, both staying in Alaska for now. For the first time in my life, nothing is really anchoring me to a place. And if I’m being honest with myself, in addition to feeling trapped by the weather, I’m bored with it here. The dating scene feels impossibly small. Every time I open a dating app, it’s the same people. Half the time I already know them, or know someone who dated them (and broken up with them for a good reason!).
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So I’m sketching out plans to move somewhere warmer, bigger and completely unfamiliar. I think I want to know what life feels like somewhere else while I’m still young enough to enjoy it. I really feel this is a moment for a big change.
The problem is that nobody seems supportive. When I bring it up, people act like I’m having a midlife crisis. Friends tell me I’ll regret it. Family members remind me that the kids are here. Other Alaskans give me the usual speech about how the Lower 48 is generic. It’s gotten to the point where I almost don’t talk about it anymore because I’m tired of defending myself.
But all the resistance has me questioning myself and whether moving is a legitimate and logical step, or whether I’m just exhausted from a hard winter and romanticizing a different life. How do you know the difference between running toward something and simply running away?
Wanda says:
You’re asking whether you’re running toward or away from something — essentially if you’re taking a positive step or being reactive. Those aren’t mutually exclusive. Sometimes we leave both because we’re exhausted by what we’ve been carrying, and also because we are moving toward something new at the same time.
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Every reason you listed for staying in Alaska has changed. You raised your children here? They’re grown. You had a marriage here? That chapter is closed. You tolerated winters for the sunny payoff? Nailed it: This spring has sucked.
Now you’re primed for a reset, and questioning how you want the near term and future of your life to unfold is not a crisis, it’s taking action. And it’s way more productive than floating along season to season in a fog of monotony, settling for an unfulfilling existence. Your friends and family may genuinely believe they’re protecting you from a mistake, but they’re also protecting their own worldview. Your decision to leave can feel like an implicit criticism of their choices.
But this isn’t a committee decision, and you’re a grown woman capable of major decisions, who absolutely should explore life’s possibilities without defending it to everyone you know. So go explore. Visit places. Rent before you buy. Spend a winter somewhere else. Gather information instead of arguments. And know that no matter where you land, you can always come home again — even if it’s just for a long visit in the middle of summer.
Wayne says:
This isn’t a midlife crisis that can be glossed over with a motorcycle, lip filler, a 20-something boyfriend (who probably went to high school with your kids — yikes), or kicking off your Cowgirl Era with a hat, boots and a two-week Nashville dive bar tour.
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This is an existential crisis with your health and happiness at risk. And you’ve faced it thoughtfully, sat with it thoroughly, and are now making the best decisions selfishly. Good for you! You can’t fault your family and friends for also being selfish and wanting you to stay in AK. Of course they don’t want their mom and friend moving far away. But you’ve got to mute that noise and focus on what’s best for you.
Yes, Alaska life is special, but it sure isn’t easy. And we don’t get medals for stubbornly battling through decades of winters. What we do get is some sweet and fleeting summer moments followed by more winters. You know that, and it’s not enough for you anymore.
Most people would totally understand an 18-to-20-year-old Alaska kid taking off to see what else is out there in the world. What, we’re supposed to stop being interested in new experiences once we hit a certain age? And we’re expected to stick around someplace forever just because we’ve always been there?
It’s time for you to go. See what life feels like when you’re not scraping ice off your windshield in May. See how much fun you can have with new people in new places. It’s exciting, it’s living, and you deserve it.
[Wayne and Wanda: Is it the winter blues I can’t shake off, or something more?]
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[Wayne and Wanda: Rebuilding my social life after a divorce]
[Wayne and Wanda: My relationship is poised for big steps, and I’m anxious]
Shares in Alaska Air Group(ALK 1.16%) rose by 12.7% in an excellent week for airline stocks. The move comes as the sector climbs a wall of worry driven by soaring jet fuel prices stemming from the closure of the Strait of Hormuz. While the market’s prior concerns are understandable, there’s growing anecdotal evidence suggesting that airlines, including Alaska Air, might emerge from the period in better shape than many expect.
This week’s airline updates
Southwest Airlines(LUV 0.83%) CEO Robert Jordan gave a presentation at the Bernstein 42nd Annual Strategic Decisions Conference, and his remarks surprised the market. It’s no secret that jet fuel prices have soared, and that’s challenging airlines’ profitability. Still, it doesn’t appear to have affected end demand, with Delta Air Lines previously telling investors that strong demand in the first quarter was continuing into the second quarter, even as it raised prices.
Today’s Change
(-1.16%) $-0.54
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Current Price
$46.05
Key Data Points
Market Cap
$5.1B
Day’s Range
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$46.04 – $47.84
52wk Range
$33.03 – $65.88
Volume
162.4K
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Avg Vol
4.5M
Gross Margin
13.76%
That positive trend, with Southwest’s Jordan telling investors that Southwest had participated in seven consecutive fare increases with “no drop off in demand at all.” Jordan went on to note that “I’m becoming increasingly bullish that we will be able to cover these fuel increases with revenue increases,” and also believes that “the industry will retain a much higher percent of the fare increases that would be typical historically.”
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What it means to Alaska Air
Given that Alaska competes with Southwest on some routes and is suffering from rising jet fuel prices, the news from Southwest is particularly relevant. For example, in its recent first-quarter earnings report, Alaska’s management said higher fuel costs would impact earnings per share (EPS) by $0.70 in the first quarter and by more than $3 in the second quarter.
Image source: Getty Images.
These are significant numbers from an airline that analysts expect to report a $0.77-per-share loss in 2026 and then $6.32 in EPS in 2027. However, if Alaska can offset fuel costs with higher prices, then those estimates might need a positive revision.
Lee Samaha has no position in any of the stocks mentioned. The Motley Fool recommends Alaska Air Group, Delta Air Lines, and Southwest Airlines. The Motley Fool has a disclosure policy.
(Bethel, AK) –Wednesday, the Ninth Circuit Court of Appeals issued a favorable opinion for the State of Alaska in ConocoPhillips Alaska v. Alaska Oil and Gas Conservation Commission (AOGCC), agreeing that State laws requiring disclosure of oil well data are not preempted by federal law.
“Alaska relies heavily on our resources and resource development,” said Acting Alaska Attorney General Cori Mills. “We are also stewards of those resources for the citizens of Alaska. Alaska’s law both allows resource development now, and encourages further development and exploration in the future. We’re pleased that the Ninth Circuit recognized that federal law has not overridden Alaska’s balanced approach.”
The Alaska Oil and Gas Conservation Commission regulates oil and gas operations throughout Alaska, including within the National Petroleum Reserve–Alaska (NPR–A). Under Alaska law, companies need permits from the AOGCC to drill and must submit well data. The AOGCC is required to keep well data confidential for 24 months.
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ConocoPhillips drilled several wells on lease holdings within the NPR–A and submitted data to the AOGCC. When the 24-month period expired, the AOGCC notified ConocoPhillips of the upcoming well data disclosure. ConocoPhillips sued in federal court to stop the disclosure process claiming that the Naval Petroleum Reserves Production Act, the federal law allowing private exploration in the NPR–A, preempted Alaska’s 24-month disclosure law. The federal district court found Alaska law preempted, and the AOGCC sought appellate review by the Ninth Circuit Court of Appeals.
On appeal, the Ninth Circuit agreed with the AOGCC. The federal Production Act does not preempt state law. The Ninth Circuit therefore reversed the district court’s holding to the contrary.
“The Alaska Oil and Gas Conservation Commission is pleased with the court’s decision upholding Alaska law,” said AOGCC Commissioner Jessie Chmielowski in a declaration filed in the litigation court. “Alaska’s balanced approach to well data confidentiality leads to increased exploration activity, not less. Alaska law allows for a two-year confidentiality period on exploration well data to leverage a company’s investment in drilling. Thereafter, making the data public has incentivized exploration on the North Slope. Placing well data in the public record allows competing companies to evaluate different exploration concepts or interpretations based on seismic data that, without well data, are just educated guesses.”
