Alaska LNG price tag climbs as lawmakers delay

By THE ALASKA STORY

June 7, 2026 – The estimated cost of the Alaska LNG Project has climbed into the $44.5 billion to $54.5 billion range, a more than 22% increase from earlier projections and a reminder that delay carries a price tag of its own.

The updated construction estimates, presented to the Senate Finance Committee by Glenfarne Alaska President Adam Prestidge, pictured above, are the figures lawmakers have been demanding since the start of the special session and throughout much of the regular session.

The numbers underscore a reality facing Alaska’s long-discussed natural gas megaproject: Inflation, financing costs, labor expenses, and construction risks continue to push costs upward, and investors are closely watching whether the Legislature will enact tax reforms that Glenfarne says are necessary to move the project forward.

“The best way to present cost construction estimates for the project was as an estimated range reflecting our best expectation of what it will cost to construct the Alaska LNG project,” Prestidge told senators.

The total project estimate now ranges from $44.5 billion on the low end to $54.5 billion on the high end.

The largest share of that cost belongs to the liquefied natural gas export facility, estimated at between $23.6 billion and $28.4 billion. The gas treatment plant is estimated at between $7.7 billion and $9.2 billion.

The 807-mile pipeline itself — the portion of the project that would first deliver North Slope gas to Southcentral Alaska — carries an estimated construction cost of between $13.2 billion and $16.9 billion.

Prestidge said the pipeline estimate is based on a more advanced Class II cost estimate completed through front-end engineering and design work performed by engineering firm Worley. That work concluded in December.

The estimates for the LNG plant and gas treatment facility remain Class IV estimates, based on prior studies, industry inputs, and Glenfarne’s experience developing LNG projects elsewhere in the United States, including Texas LNG and Magnolia LNG.

The updated cost estimates arrive as lawmakers debate legislation that would replace traditional property taxes on the project with a volumetric tax structure tied to gas flowing through the system.

Supporters argue the change is necessary to make the project financeable and competitive in global markets. Opponents have doubted the plan while providing no reasonable alternative.

Prestidge told lawmakers the tax reform is a critical component of the project’s financing structure. It would provide certainty for investors while reducing the risk of valuation disputes that have plagued other large energy projects.

Prestidge noted that potential investors who recently attended an Alaska LNG conference in Anchorage are waiting to see what the Legislature does before making major commitments.

The stakes are significant for Southcentral Alaska, which faces looming natural gas shortages as Cook Inlet production continues to decline.

During testimony before both House and Senate committees, legislators expressed concerns that if only the first phase of the project is built, which is a pipeline bringing North Slope gas to Southcentral Alaska, consumers could ultimately face high energy prices if construction costs escalate.

Prestidge sought to reassure lawmakers that cost overruns would not be passed on to Alaska consumers.

Under the framework currently being negotiated with Enstar Natural Gas Co., the proposed gas transportation rate would be fixed at approximately $16 per thousand cubic feet and would not be reopened if construction costs exceed estimates.

Prestidge said Glenfarne supports statutory language specifically prohibiting cost overruns from being borne by the State of Alaska or by regulated utility customers.

Enstar President John Sims told the House Finance Committee that the utility has spent roughly 10 months negotiating with Glenfarne and is working toward a final agreement that would govern the transition from imported liquefied natural gas to North Slope gas delivered through the Alaska LNG pipeline.

The proposed gas supply agreement would extend for 30 years and ultimately be reviewed by the Regulatory Commission of Alaska.

Sims said Enstar will not take an ownership stake in either imported LNG facilities or the pipeline project itself.

For imported LNG expected before pipeline completion, pricing is tied to the Japan-Korea Marker benchmark, known as JKM, plus shipping and terminal costs. JKM prices have fluctuated dramatically in recent years, ranging from roughly $8 per thousand cubic feet to more than $18 today.

As a result, Enstar expects delivered gas costs between $16 and $22 per thousand cubic feet by 2033, replacing the current average gas cost of approximately $10.80.

Once Phase 1 of Alaska LNG is operational, Sims said, Enstar would pay the fixed $16 rate negotiated with Glenfarne.

As additional volumes move through the pipeline and later phases of the project are completed, that transportation cost is expected to decline.

For Alaska lawmakers, the June 3 presentation highlighted the consequences of continued delay.

The Alaska LNG project has been under discussion for more than two decades. Every year spent debating rather than building has brought higher labor costs, higher material costs, higher financing costs, and a larger overall price tag.

The latest estimates suggest that trend has not changed.

The question now before the Legislature is whether Alaska will create the tax framework Glenfarne says is necessary to secure financing and begin construction, or whether lawmakers will continue debating while the cost of the project keeps climbing. Special session ends June 19.