LNG In, LNG Out: The Race to Import and/or Export Alaska Natural Gas

The Alaska LNG integrated gas infrastructure project comprises three main components: a gas treatment plant at Prudhoe Bay, an 800-mile pipeline to Southcentral with off-takes for in-state use, and a natural gas liquefaction plant in Nikiski. To date, more than $600 million has been invested in project engineering and design.

A dozen years since the state established AGDC to bring North Slope gas to market, this winter saw a whirlwind of new developments.

In January, AGDC selected Texas-based Glenfarne Group to take the reigns of the $44 billion Alaska LNG Project. Founded in 2011, Glenfarne develops, owns, and operates energy infrastructure, such as the Texas LNG Project slated to export gas by 2028 from Brownsville, Texas.

The selection followed a resolution in December from the Alaska Industrial Development and Export Authority (AIDEA) supporting the development of Alaska LNG Phase 1, the in-state pipeline portion. The resolution authorizes AIDEA to negotiate and sign a letter of credit to backstop front-end engineering and design (FEED) for the Alaska LNG pipeline. The letter of credit will allow AGDC to unlock up to $50 million in private investment to move the Alaska LNG pipeline through FEED.

AGDC welcomed the AIDEA resolution with this statement: “The State of Alaska is facing a looming energy crisis, and Alaska LNG represents the best long-term energy solution for our state. The Alaska LNG pipeline will deliver reliable, affordable, low-emissions energy and provide billions of dollars in economic benefits for Alaskans. Building the Alaska LNG pipeline also strategically positions Alaska to increase the energy security of our Pacific allies by derisking construction of the other Alaska LNG components that will generate and commercially export LNG.”

The Next Phase

The AIDEA resolution followed a memo in November 2024 from Governor Mike Dunleavy to the Alaska Legislature providing analysis of the looming Cook Inlet energy shortfall. The memo noted three key findings from an independent analysis by energy analytics firm Wood Mackenzie.

The first finding is that Alaska LNG Phase 1 economics are superior to or competitive with alternatives. The analysis figures that Alaska LNG Phase 1 can predictably deliver natural gas in a price range between $8.97 to $12.80 per million British thermal units (mmbtu). Alaska LNG Phase 1 is not subject to market volatility, it adds. However, imported LNG is difficult to reliably price because of market volatility. Wood Mackenzie conservatively estimates prices between $10.21 to $13.72/mmbtu, excluding the additional costs of required onshore infrastructure, estimated to be in the hundreds of millions of dollars, and regulatory and permitting uncertainty, which will also drive costs higher for imports.

The second finding is that Alaska LNG will dramatically lower long-term Alaska energy prices. The analysis anticipates that Alaska gas prices will drop to $2.23/mmbtu when the export components are complete and full volumes are achieved. For comparison, the current price of Cook Inlet gas is approximately $8.69/mmbtu.

Finally, Wood MacKenzie forecasts that Alaska LNG Phase 1 will uniquely deliver up to $16 billion in additional Alaska economic benefits that won’t occur with other options. These benefits include construction capital expenditures, jobs, tax and royalty state revenue, consumer savings from lower gas prices, business and economic growth, and improved Fairbanks health outcomes and investment.

Extraordinary Order

All those benefits would accrue before Alaska LNG Phase 2, which includes infrastructure components to convert gas to LNG and export it. Export it where?

On March 20, Taiwan’s state-owned petroleum company, CPC Corporation, signed an agreement with AGDC to buy LNG and invest in the Alaska LNG project. A week later, Glenfarne Group formally agreed to lead the project, taking a three-quarters ownership stake.

The Alaska LNG Project was first authorized to deliver North Slope natural gas to US allies across the Pacific by the Trump administration in 2020, and it was reauthorized by the Biden administration in 2022 as the only federally permitted LNG export facility on the US West Coast.

Upon returning to office, President Donald Trump included the project in a January 20, 2025, executive order titled “Unleashing Alaska’s Extraordinary Resource Potential.” It states that the policy of the United States is to “prioritize the development of Alaska’s liquified natural gas (LNG) potential, including the sale and transportation of Alaskan LNG to other regions of the United States and allied nations within the Pacific region.” The executive order further directs the heads of all executive departments and agencies to take all necessary steps to “prioritize the development of Alaska’s liquified natural gas (LNG) potential, including the sale and transportation of Alaska LNG Project, giving due consideration to the economic and national security benefits associated with such development.”

In response, AGDC President Frank Richards said, “Alaska LNG is broadly supported at federal, state, and local levels because of this project’s significant strategic, economic, and environmental benefits. Alaska LNG will annually strengthen the US balance of trade by approximately $10 billion, create thousands of jobs, and eliminate up to 2.3 billion tons of carbon emissions over the project’s thirty-year authorization.”

The administration’s cabinet nominees also advocated for Alaska LNG during confirmation hearing exchanges with Alaska Senator Lisa Murkowski. “We need the help to unleash the opportunities that we have to not only allow Alaska to have that energy independence that we so rightfully should have but also to be able to help not only our country but our friends and allies,” said Murkowski.

Harvest at Hand

However, Alaska’s energy independence will take time. The Wood MacKenzie analysis is based on construction starting in 2026 and Alaska LNG Phase 1 starting operations in 2031. That would be just in time for North Slope natural gas to stave off the depletion of Cook Inlet resources anticipated in the 2030s, but local energy utilities are scrambling for shorter-term solutions.

The idled export terminal at Nikiski holds the key. Harvest Alaska, an affiliate of Hilcorp, entered an agreement with the terminal’s owner, Marathon Petroleum Corporation, to acquire the terminal and reconfigure it for LNG imports.

The project, in cooperation with Chugach Electric Association, aims to facilitate prompt delivery of additional natural gas supplies to Southcentral by 2026, with full-scale operations anticipated to commence in 2028.

“Providing our members with safe, reliable, and affordable electric service is core to our values and mission. We are pleased to have a potential solution to meet the gas needs of our members and at the right time,” says Chugach CEO Arthur Miller. “We’ve been looking at options to fill the gap left by our expiring Hilcorp contract, which ends on March 31, 2028. This is a great opportunity to work with partners who have extensive experience and knowledge of gas operations in Alaska. We look forward to ongoing discussions and analysis with Harvest Alaska as they progress the front-end engineering and design study over the next several months.”

Under the agreement, Harvest will possess, develop, and manage the LNG terminal and infrastructure, which will enable Chugach, Marathon, and other Railbelt customers to secure additional natural gas supplies.

“We believe the Kenai LNG terminal offers the quickest and lowest-cost solution to bring additional natural gas to Southcentral Alaska and beyond,” says Bruce Jackman, vice president of Marathon’s Kenai Refinery, located across the highway from the terminal. “Our Kenai refinery employees work around the clock to provide gasoline, diesel, and jet fuel to their fellow Alaskans, and a reliable supply of natural gas is critical to the refinery’s operations. We’re excited about this partnership with Harvest and Chugach to work toward bringing new natural gas to the region.”

Meanwhile, while taking on the Alaska LNG project, Glenfarne Group has a separate agreement with ENSTAR Natural Gas to advance import infrastructure in the same facility.

The metaphorical cat has made its choice: first in, then out. Alaskans are waiting at the threshold.