$25 million grant for Anchorage port
The Municipality of Anchorage received a $25 million federal grant toward its Port of Alaska reconstruction but the grant won’t initially reduce new tariffs for its new petroleum products and cement terminal. Building of that facility is to be underway next summer (piling and other components are now being fabricated) at an initial phase cost of $42.2 million. The estimated ultimate cost of the new petroleum and cement terminal is estimated at about $215 million, including financing costs. A recalculation of tariffs under a 10-year escalating fee schedule will happen once total costs, including financing, are fully known, port officials said. Bids for the final phase of the petroleum and cement terminal project will be requested in early 2020. Port officials are also pursuing other federal grants.

Meanwhile, the cost of the general cargo dock rebuilding, the next phase for the port project, depends on how reconfiguration of the docks will be decided. If modest slow-growth is expected long-term for the state’s economy the rebuild could be smaller, requiring less of an investment. However, a smaller dock could also handle more volume if it incorporates efficiencies like new cranes, allowing ships to be unloaded or loaded faster
Higher port fees benefit some
One Alaska fuel supplier likely to benefit from the higher petroleum dock tariffs in Anchorage is Marathon Petroleum, which operates its Kenai refinery and has its own pipeline to Anchorage. Marathon doesn’t have to import fuel through the Anchorage port facilities, although it could do if it needs to import fuel to serve new customer demand. The company is delivering at maximum capacity in its pipeline, we hear. As port tariffs increase Marathon could increase its own prices, and profit, on pipeline-delivered fuel.