Enstar in early discussions for use of Port MacKenzie for LNG delivery hub

Mat-Su port officials are in preliminary discussions with Enstar Natural Gas Co. on use of Port MacKenzie as a possible liquefied natural gas, or LNG, import and distribution hub. The conceptual plan, port director Dave Griffin said, is for a floating LNG regasification unit to be moved to Port MacKenzie to operate at least part of the year.

The facility would convert the chilled liquid gas back to a gaseous state so that it can be moved through Enstar’s existing pipeline system in Mat-Su. Enstar has received permission from the Regulatory Commission of Alaska to extend its pipeline, with an estimated cost of $57 million.

Griffin said the conversations with Enstar have been mostly, “about they asking questions about the port and its capabilities and us answering.”

Enstar has confirmed that it is interested in Port MacKenzie but that it is also considering Nikiski, on the Kenai Peninsula, for a location for the LNG regasification unit, company spokesperson Lindsay Hobson said.

The discussions are at an early stage, and it is still unknown what modifications are needed at the port to accommodate the LNG operation as well as a gas pipeline. Enstar’s existing gas pipeline is near the small Titan LNG plant a few miles north of the port and could be extended south if the project moves ahead.

The Titan plant itself, which has limited LNG storage, could play some role in the unloading and handling of the liquefied gas. The facility now supplies LNG made from Cook Inlet gas that is trucked up the Parks Highway to the Interior Gas Utility in Fairbanks.

Later this year the IGU will begin receiving deliveries of LNG trucked from a new gas liquefaction plant being built on the North Slope by Harvest Alaska, an affiliate of Hilcorp Energy. That will reduce IGU’s reliance on the Titan plant, which will then have capacity for other uses.

Enstar is considering LNG imports from out of state and has told the regulatory commission that it plans to have a purchase contract in place for the liquefied gas by the end of the year. Imports of LNG are likely to be needed, at least on a temporary basis, because Cook Inlet’s existing gas fields are declining in production and will be unable to meet the annual demand for gas beginning in 2027, according to studies by the state Division of Oil and Gas.

On other Port MacKenzie matters, Griffin said there has been a seasonal upswing in activity this summer that may increase in the future because of strong North Slope oil development work and the pending large Port of Alaska reconstruction project. Contractors likely to be involved in the Anchorage port work are looking at available land adjacent to Port MacKenzie to store equipment and supplies which can then be shuttled by barge the short distance across Knik Arm to the Anchorage port.

One major operation at Port MacKenzie earlier this year was the docking of a cement ship to unload 36,000 tons of cement for use in Alaska construction, Griffin said. The cement delivery has become an annual event. It took six and a half days to unload the cement, which came pre-packaged in “super-sack” containers.

Cranes on the ship lifted the super-sacks, each holding one-and-a-half tons, to flatbed trailers on the dock.

Construction contractors are also using the port this summer to support delivery of equipment and materials by barge to projects in western Alaska.