Hilcorp hopes to bring online by the end of 2018 a pipeline that would eliminate the need for a controversial oil terminal that sits near the base of an active volcano on Alaska's Cook Inlet.

The proposed $75 million project by Hilcorp subsidiary Harvest Alaska includes the construction of new onshore and offshore pipelines as well as the conversion of an existing pipeline from gas to crude oil. The system would allow oil to be transported from the east side of Cook Inlet to the Andeavor (formerly Tesoro) refinery near Nikiski via subsea pipeline.

Oil is currently carried via tanker from the Drift River terminal, which lies in the shadow of the Redoubt volcano. An eruption would risk melting the glaciers that feed into Drift River, flooding it with ice, water and mud and threatening the terminal. The terminal has in the past been criticised by environmental groups.

The volcano last erupted in 2009, causing mudslides that damaged the terminal, which was then owned by Chevron. It also forced Chevron to shut-in production at its Cook Inlet platforms.

The proposal, which was submitted last week to state regulators, would allow the Drift River facility as well as the Christy Lee platform to be shut down and decommissioned.

"The Cross Inlet Extension Project will bring a higher level of safety and reliability for shipping oil across Cook Inlet," Harvest Alaska president Sean Kolassa said. "We think it’s the right thing to do."

US-manufactured steel has already been ordered and is sourcing "other long-lead items" for building the system during the 2018 construction season. The company is also meeting with community and state representatives ahead of build-out.

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Hilcorp eyes 2018 start for Cook Inlet pipeline