Matt Kissinger and Frank Richards of the Alaska Gasline Development Corp. prepare to testify to the House Finance Committee on May 27, 2026, in Anchorage. Richards is AGDC's president and Kissinger is AGDC's venture development manager. The hearing was conducted as part of a special session called by Gov. Mike Dunleavy. Kissinger and Richards tesified in favor of property-tax concessions sought by Glenfarne, now the majority partner in the Alaska natural gas pipeline project. Dunleavy has argued that the tax concessions are the needed to make the pipeline project viable. (Photo by Yereth Rosen/Alaska Beacon)
Last month, a confidential draft agreement between the Alaska Gasline Development Corporation and Glenfarne leaked. It shows why AGDC is so reluctant to make the details public: The Alaska LNG project could be a financial black hole for Alaska, at a time when the state is struggling to keep schools open and roads maintained.
The document suggests that if Glenfarne fails to develop the tenuous megaproject, Alaska could have to pay to regain control of the asset it’s developed with state funds — a fee based on a subjective assessment of the change in the project’s value under Glenfarne, which could be billions of dollars. That also means if the governor’s proposed tax subsidy boosts the project’s economics, the state’s clawback fee could soar if the company withdraws.
History shows that blank checks and huge tax cuts for outside businesses don’t pencil out for Alaskans. That makes all of the manufactured urgency around Governor Dunleavy’s attempt to force through a massive property tax cut for the LNG pipeline developers this year even more alarming. Glenfarne Group, the company the state gave away development rights to, won’t even have accurate engineering cost estimates for the project until the middle of next year at the earliest. Since the project’s costs will likely escalate, the estimated $16 billion these tax cuts will take from state and borough revenue are likely to be an underestimate too.
Developers’ cost estimates for the project continue to shift, but remain unrealistic and unsupported by data. Through months of legislative hearings, a consultant with AGDC maintained that the decade-old estimate of $46.2 billion was accurate, though another contractor for Governor Dunleavy privately said it was $57 billion. Economists from the Department of Revenue later told legislators that the project costs could range from $46.2 to 92.4 billion. After Senator Stedman called these outdated estimates “complete garbage,” Glenfarne admitted the range could be $44.5 to 54.5 billion dollars.
But according to legislative consultants and a new report on LNG export projects in North America, cost overruns are essentially a guarantee — averaging out to 60 percent higher than projected costs across 20 projects. Applying that to Alaska LNG, the report’s authors found the project could actually cost as much as $104 billion. Accurate cost estimates are essential for legislators to make fact-based decisions around proposed property tax cuts. If they don’t have detailed information, any legislation will be based on false assumptions, and have unquantified consequences.
The developers still haven’t answered basic questions that any lender would ask about the claims project developers are making. Questions like: Why would developers assume that North Slope producers will sell gas to the pipeline for $1.50 per thousand cubic feet (mcf) when gas is currently trading at $3/mcf on the North Slope? Where is the gas going to come from, since the promise of untreated gas from Great Bear Pantheon has already evaporated? What hypothetical industrial customer will anchor ‘Phase One’ of the pipeline by buying the majority of the gas? How much will a Fairbanks spurline cost, and who is going to pay for it? According to recent testimony by Adam Prestidge of Glenfarne, developers think Alaskan consumers should foot that bill. So when promises of affordable gas for Alaskans get thrown around, be sure to read the fine print, and ask, who will pay to build utility infrastructure to use gas in the Interior, or for the thousands of dollars for homeowners to convert their homes to natural gas? What else is in AGDC’s contract with Glenfarne that could cost Alaska millions or billions of dollars?
AGDC has attempted to brush aside these reasonable inquiries from legislators trying to protect Alaskans from inflated energy prices and unknown costs. AGDC board member Dennis Michel recently attempted to joke that legislators are like mosquitoes, calling them “irritating, relentless, and somehow always present,” for asking questions about this project.
In reality, as the leaked draft AGDC-Glenfarne agreement shows, the ever present questions hovering over this project are what crucial information are developers withholding, and what will it cost Alaskans?
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Courtesy of Alaska Beacon
