Marathon

Marathon Petroleum Corp. says it is in talks with undisclosed parties on a sale of the company’s refinery at Nikiski, on the Kenai Peninsula.

Marathon Petroleum Corp. says it is in talks with undisclosed parties on a sale of the company’s refinery at Nikiski, on the Kenai Peninsula.

The possible sale was disclosed in Marathon’s third quarter investor briefing Nov. 2 and was also reported in Petroleum News’ Nov. 7 edition.

Marathon’s management told financial analysts it was “pursuing strategic transaction for the Kenai refinery,” which could include a sale.

No mention was made of the mothballed natural gas liquefaction plant, formerly owned by ConocoPhillips, which is now owned by Marathon.

A Kenai community leader, asking not to be identified, said he has been told definitive information on the sale will be available in the second quarter of 2022.

Mike Hennigan, Marathon Petroleum’s CEO, told analysts, “We have done an analysis, and (we’ll) disclose it now (because) we’re in pretty advanced discussions with several parties.”

“We may be able to execute something (a sale) in the short term, but it may not happen as well,” Hennigan said.

It’s considered unlikely that the plant would close considering its volume of jet fuel and gasoline sales and its importance as the largest refinery in the state.

The refinery is a major supplier of gasoline in the state and a major supplier of jet fuel to Ted Stevens International Airport in Anchorage, one of world’s top refueling stops for international air cargo carriers on trans-Pacific flights.

The refinery has been put on the auction block before. When it was owned by Tesoro Corp. prior to Tesoro’s acquisition by Marathon, solicitations for a buyer were made, and Tesoro also considered closing the refinery and supplying company-owned retail outlets from Tesoro refineries in Washington state and Hawaii.

The plan was shelved then but the sale option has now been put back on the table by Marathon. The refinery is a major Kenai Peninsula employer and source of property taxes to the Kenai Peninsula Borough.

If the plant is sold it will be the second time that the Marathon name will have left Alaska. Marathon Oil Co., the legacy company of what is now Marathon Petroleum, was one of Alaska’s earliest oil and gas explorers and producers.

The company discovered both oil and gas onshore and offshore in Cook Inlet and was a partner to Phillips Petroleum Co. in the development of the Kenai LNG plant in the late 1960s.

This was a pioneering initiative that involved the world’s first long-distance delivery of LNG by sea. Marathon eventually sold its share of the plant to its partner, now ConocoPhillips, which operated export LNG shipments until 2015.

At that point the plant was mothballed and was eventually sold to Tesoro, which owned the nearby refinery. Tesoro later became part of Marathon Petroleum.

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