Chugach is actively involved in discussions with companies that can meet our short and long-term needs for natural gas. This work has been going on since 2022 when Hilcorp Alaska, LLC (Hilcorp) informed the Alaska Railbelt utilities it will not extend gas contracts beyond their current expiration dates. These dates vary for each utility, with Chugach’s contract with Hilcorp set to expire on March 31, 2028.
On Feb. 6, 2025, it was announced Chugach is working with Harvest Alaska (Harvest) and Marathon Petroleum Company (Marathon) to bolster gas supply in Southcentral Alaska. Harvest plans to acquire the existing Kenai liquefied natural gas (LNG) terminal from Marathon to repurpose the existing assets, leading to gas supply availability as early as 2026, which meets Chugach’s timeline.
Under the proposal, Harvest would own, develop, and operate the LNG terminal and infrastructure, allowing Chugach, Marathon, and other Railbelt utilities to secure additional natural gas supply to meet the market demand. Chugach is in ongoing discussion and analysis with Harvest as they progress the front-end engineering and design (FEED) study over the next several months.
Chugach meets about 60% of our natural gas requirements through our two-thirds working interest ownership in the Beluga River Unit (BRU) gas field, which is not part of the expiring contract. The remaining 40% comes from our contract with Hilcorp that expires in 2028.
Additionally, we have been working on other fronts to ensure available natural gas. Chugach has co-invested in 15 new wells at BRU with Hilcorp, and five more wells are planned for 2025. We currently contract for 2.1 billion cubic feet (Bcf) of gas storage service with Cook Inlet Natural Gas Storage Alaska, known as CINGSA, and we are evaluating the feasibility of adding up to 20 Bcf of gas storage at the BRU.
In October 2024, we commissioned a 40-megawatt, two-hour Battery Energy Storage System (BESS), owned 75% by Chugach and 25% by Matanuska Electric Association, Inc. The BESS is expected to reduce Chugach’s annual gas use by 5% and is already proving to be a useful tool by providing contingency reserves, which allows the system to respond instantly to changing grid conditions, increasing reliability and providing greater operational efficiencies.
Chugach will continue to update its members as gas supply decisions are made.
