Port Nikiski is located on Alaska's Kenai Peninsula about 11 nautical miles (17 kilometers or 10 miles by air) northwest of the Port of Kenai. Located along the Sterling Highway, Port Nikiski is an incorporated town of over 4300 people, almost 90% of whom are white. Unlike other ports in Alaska, only 10% of Port Nikiski's population is Native Alaskan.

Several oil refineries are located in the Port Nikiski where oil from the North Slope is processed to gasoline. Port Nikiski's docks also support offshore drilling. In addition to the oil industry, inhabitants find employment in logging, commercial and sport fishing, retail, government, and tourism services. Fifty-six of Port Nikiski's residents have commercial fishing permits.

Port Nikiski was homesteaded in the 1940s in what was traditionally Kenaitze Indian territory. When oil was discovered on the Kenai Peninsula in 1957, Port Nikiski began to grow as oil companies established operations there. By the mid-1960s, Port Nikiski was home to facilities owned by Phillips 66, Unocal, Chevron, and Tesoro.

A Tesoro Alaska oil refinery is located in Port Nikiski to process oil from Cook Inlet and the North Slope into jet fuel, diesel, and gasoline. BP also has a natural-gas-to-liquid-fuel pilot plant in Port Nikiski.

Some 500 residents work at the Agrium, Inc. fertilizer plant in Port Nikiski that produces about a million tons of urea and 600 thousand tons of ammonia per year. Portable modules are being built in Port Nikiski by Alaska Petroleum Contractors and Natchiq Inc. for use in the Alpine oil field in the North Slope.

There are two airports in Port Nikiski, one owned by Shell Oil. The Sterling Highway connects Port Nikiski to Anchorage.

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