Standard Oil Company Refinery and Tesoro Refinery
The first oil refinery in Nikiski was built by Standard Oil Company in 1962. It was located on Cook Inlet side of the Kenai Spur Highway in Nikiski, near where the Homer Electric facility is now located. Of the original oil refinery, one building remains now - the one that directed aircraft to the "Kenai Airport, 11 miles SSE."
In 1969, Tesoro (an oil exploration company out of San Antonio, TX) built a second refinery, this one located across the road from the Standard oil facility. The name "Tesoro" means "treasure" in Spanish. In recent years the years the Tesoro refinery changed hands, becoming Conoco-Phillips and then Marathon Oil. The refinery employs many Nikiski residents.
A pipeline runs from this location transporting petroleum products to the Port of Anchorage. See below for more information.
Lowell Hunt, Virgil Deane and H.G. Vesper at the 1962 groundbreaking ceremony for Standard'refinery.
Tesoro Refinery (now Marathon Refinery)
About the Tesoro Refinery
Reprinted from Petroleum News
Article by Kay Cashman
Vol. 24, No.52, Week of December 29, 2019
In 1969, the Cook Inlet basin was in its prime, producing 225,000 barrels of oil a day. In September of that year Alaska got rich on its biggest North Slope lease sale to date, which followed the giant Prudhoe Bay oil discovery, netting $900 million for a state whose general fund held a little more than $41 million.
Enter Tesoro, a small company from San Antonio, which bought out Alaska Refining Co., owner of a tract of land on the inlet, 60 miles southwest of Anchorage at Nikiski. Included in the deal was a contract with the state of Alaska to refine its oil. Basically, Tesoro would purchase 15,000 barrels of crude per day from the state, which had the option of receiving its royalty (12% in cash or in kind).
The Kenai refinery also had a contract to produce jet fuel for the U.S. Air Force and diesel fuel for the Alaska market.
Tesoro moved quickly with construction of the Kenai refinery, which opened for business on Nov. 15, 1969, and began turning Alaska oil into quality transportation fuel to support the burgeoning population of the young state. Operating with a staff of 17, the refinery received and processed oil from Cook Inlet basin’s on and offshore fields at a pace of 17,500 barrels a day, at first manufacturing only diesel and jet fuel.
“We put significant money into the Alaska refinery … our initial investment was close to $20 million,” Tesoro founder Robert West later recounted.
Over the next 5 years the Kenai refinery built a pipeline to deliver products directly to the Anchorage airport and the Port of Anchorage and began to diversify its product lines.
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Cook Inlet oil production peaked in 1970 and was soon swamped by North Slope crude that started moving down the trans-Alaska pipeline in 1977. The Kenai refinery was the first to refine North Slope oil.
Another milestone for the refinery was in 1971 when the first of several service stations was built at an Anchorage shopping center.
Since then, there has been more than a billion dollars of investment in the refinery that expanded its capacity, complexity and improved its environmental performance, including completion of a hydrocracker in 1980 and the launching of a ULSD, or ultra-low sulfur diesel, project in late November 2005.
In further demonstrating its “commitment to producing and providing cleaner fuels for Alaskan consumers,” Tesoro said it was investing $45 million to construct a DDU, or distillate desulfurization unit, at the Kenai refinery. The DDU had a design capacity of 10,000 barrels per day and went online in 2007.
Complete article:
https://www.petroleumnews.com/pntruncate/860315600.shtml
Photo at left: Tesoro Refinery, 1982, from Alaska's Digital Archives.
Citation: Bill Bacon photograph files, Archives and Special Collections, Consortium Library, University of Alaska Anchorage
Aerial view of Standard Oil Refinery, circa 1964, with port terminal beyond (photo from UAA)
Aerial view of Standard Oil Refinery, circa 1964 (photo from UAA)
Marathon Refinery in 2021 (Photo Credit: Marathon Petroleum)
Nikiski Alaska Pipeline
The Nikiski Alaska Pipeline was constructed in 1976. The pipeline has a 10.75-inch outside diameter and transports refined petroleum products (jet fuel, gasoline and diesel) from Tesoro’s [Marathon's] Kenai Refinery to the Port of Anchorage.
Nikiski Alaska Pipeline is a buried pipeline that begins at Tesoro Alaska Pipeline Company’s (Tesoro) [now Marathon] Kenai Refinery in Nikiski. The pipeline route runs along the Kenai Spur Highway through the Captain Cook State Recreation Area, and then parallels the coast to Point Possession before crossing the Turnagain Arm. The pipeline route continues along the Tony Knowles Coastal Trail, through the Ted Stevens Anchorage International Airport, and then along Northern Lights Boulevard. The pipeline runs near the Alaska Railroad right-of-way for the remainder of the route, terminating at the Port of Anchorage.
Current Operator
- Tesoro Logistics Pipelines LLC
Regions
- Southcentral
Original ROW Lease Dates
- January 30, 1976 - January 30, 2006
Amended Lease Dates
- July 28, 2004 - January 30, 2031
Product
- Refined Petroleum Products
Diameter (inches)
- 10.75
System Length (approx. miles)
- System Length: 52.50
- Length on State Lands: 21.50
Normal Wall Thickness (inches)
- 0.188
- 0.625
Associated ADL Numbers
- 69354
Positions
- Buried
Year Constructed
- 1976 - 1976
Source: https://dog.dnr.alaska.gov/Services/Pipeline/Nikiski%20Alaska
Nikiski Alaska Pipeline route