JUNEAU — A renewed push is underway for a $44 billion gas pipeline in Alaska, as the state agency responsible for the project encourages the Legislature to consider a substantial investment of up to $800 million to move the long-sought megaproject forward.
Interest in the 800-mile gas line from the North Slope has surged following President Donald Trump’s vocal support for the initiative, prompting several Asian countries to express interest in investing and purchasing gas. However, concrete agreements have yet to be finalized.
Governor Mike Dunleavy and Alaska’s congressional delegation, which is firmly Republican, have expressed optimism about the Alaska LNG project. Some members of the Legislature share this enthusiasm, although many remain skeptical about the feasibility of the pipeline being built, particularly within the ambitious timeframe proposed by the project’s new private developer.
Frank Richards, president of the Alaska Gasline Development Corp. (AGDC), presented the project’s merits to legislators, emphasizing that it has been fully permitted and qualifies for up to $28 billion in federal loan guarantees.
Upcoming delegations from South Korea and Thailand are expected to visit Alaska to explore the pipeline project further. AGDC officials have indicated that the Trump administration is actively engaging leaders from various Asian nations to secure commitments for the pipeline, with representatives slated to attend a June summit in Alaska, according to The New York Times.
AGDC announced in January a partnership with Glenfarne, a New York-based company, as the project’s lead developer, injecting new urgency into discussions. Although the details of the deal remain confidential, AGDC disclosed that Glenfarne has taken a 75% stake in the pipeline for the responsibility of reaching a final investment decision, a critical milestone for the megaproject.
Recently, Glenfarne opted to defer a request for AGDC to provide $50 million as an insurance policy for ongoing engineering and design work. Instead, Glenfarne indicated it would secure private funding for this phase, which is estimated to need $150 million.
Ambitions for the project are palpable among Alaskan lawmakers.
Anchorage Republican Representative Chuck Kopp has even penned an op-ed encouraging citizens to shed their skepticism, while fellow Anchorage Republican Representative Mia Costello introduced a resolution emphasizing support for the swift advancement of the pipeline, stating, “We really will be having a gas line. It is in our future.”
Nonetheless, skepticism lingers among some legislators regarding the project’s overall viability. Questions have arisen concerning the project’s projected costs and timelines, and concerns have been voiced about the decision to appoint Glenfarne, a relatively new entity in the oil and gas sector, as the lead developer.
Richards stated that various proposals had been considered, but Glenfarne received the endorsement of AGDC’s board alongside investment bank Goldman Sachs.
Some lawmakers have expressed concern regarding the Legislature’s limited oversight of the pipeline initiative. In 2014, the Legislature had passed Senate Bill 138, which afforded AGDC extensive authority to advance the pipeline development independently.
Former House Speaker Mike Chenault, now an AGDC board member, defended the agency’s autonomy, arguing it allows for timely decision-making. He warned, “I believe that if the Legislature gets involved, that this project will go away.”
Amid a projected shortfall of natural gas from Cook Inlet for Southcentral Alaska, the pipeline has been marketed as a long-term solution to secure the region’s gas supply. Furthermore, the initiative is seen as a potential financial boon for the state.
AGDC officials indicated that Alaska’s interest in the project could ultimately generate hundreds of millions of dollars annually, yet negotiations with Glenfarne and other potential investors regarding financial terms are ongoing.
Richards elaborated on the potential for Alaska to make further financial commitments to the project for greater revenue opportunities, stressing, “The big question for the state of Alaska going forward is really going to be around that equity financing.”
Currently, the project is divided into phases. The first phase includes constructing an 807-mile gas pipeline from the North Slope to Nikiski, while the second phase entails establishing facilities to treat the gas for export.
Richards conveyed to lawmakers that state entities, Alaska Native corporations, Alaska-based businesses, and individuals could collectively invest up to 25% in these subprojects. The estimated cost for the pipeline alone would be around $800 million, whereas total investments for the pipeline and two plants could exceed $3.5 billion, as indicated by AGDC board members.
However, legislators are grappling with constrained revenue and a concerning fiscal landscape, which makes it improbable for the state to fund the $800 million investment, lawmakers admitted.
Senator Cathy Giessel, a Republican from Anchorage and chair of the Senate Resources Committee, conveyed a lack of enthusiasm among lawmakers to invest state funds into the project, describing the proposed $800 million as “absurd.”
Concerns about the project’s timeline are also prevalent, with many legislators expressing doubts. Richards communicated that a final investment decision could be made by year’s end, with a potential pipeline completion and gas delivery to Alaskans by 2030 or 2031.
During a joint legislative committee hearing, House Speaker Bryce Edgmon observed that key elements seemed missing from AGDC’s responses to legislators and articulated that the 2031 timeline appeared overly optimistic.
Questions about project costs have also emerged, with the full undertaking estimated at $44 billion, and the pipeline’s cost projected at just under $11 billion, according to AGDC board members.
Representative Zack Fields from Anchorage raised concerns regarding how the gas pipeline’s cost estimates could be justified, noting the Trans-Alaska Pipeline System’s completion in 1977 at a cost of $8 billion, arguing that inflation hasn’t sufficiently accounted for the projected cost surge to 37% higher than TAPS.
Warren Christian, an AGDC board member, maintained that the cost estimates had been robustly calculated, with ExxonMobil’s involvement in vetting the figures.
As discussions regarding the pipeline persist, plans to import gas to meet Southcentral Alaska’s needs are concurrently progressing, providing an additional pathway to address the state’s energy challenges.
Veteran lawmakers have echoed a cautious but hopeful sentiment.
Senator Bill Wielechowski, a Democrat from Anchorage, acknowledged potential favorable developments such as international interest and support from the Trump administration, yet expressed weariness, pointing out that he has encountered multiple proposals throughout his 18 years in the Legislature.
“I’m a bit wary at this point, just based on promises we’ve heard in the past,” said Wielechowski.
Referencing previous experiences, he cited the former involvement of TransCanada, which received $500 million from the Legislature in 2008 for pre-construction costs, only to have the state later buy out its stake for $64 million seven years down the road.
While expressing support for the pipeline’s potential to generate state revenue, Wielechowski, like many of his colleagues, remains uncertain about the project’s actualization.
“I want it to happen. I share the sentiment that I think many Alaskans share — I’ll believe it when I see it,” he concluded.
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