Alaska LNG Project Secures Private Backing After Decade-Long Development

A landmark agreement between Alaska Gasline Development Corporation and Glenfarne Group marks a crucial turning point for Alaska's LNG project. The privately-funded development includes a carbon capture plant, export facility, and 807-mile pipeline, despite environmental concerns. The project aims to deliver 3.5 billion cubic feet of gas daily.

Project Overview

Alaska's LNG project reached a significant milestone in January 2025 with the signing of an exclusive framework agreement between the Alaska Gasline Development Corporation (AGDC) and Glenfarne Group. After ten years of planning and permitting, Glenfarne will privately lead and fund the project's development, including an Arctic Carbon Capture plant, LNG export facility in Nikiski, and a state-spanning pipeline.

Infrastructure

The project aims to deliver approximately 3.5 billion cubic feet of gas daily from the Prudhoe Bay and Point Thomson fields, with most destined for international markets. The Nikiski facility is designed to process up to 20 million tonnes of LNG annually (mtpa), featuring three LNG trains, two 240,000 cubic metre storage tanks, and two loading berths. An 807-mile underground pipeline will transport the gas from the North Slope to Southcentral Alaska. US LNG exports amounted to almost 95mtpa in 2024.

Financing

Financial backing was secured in December 2024 when the Alaska Industrial Development and Export Authority approved a letter of credit to support the project's front-end engineering and design (FEED). This authorisation unlocks up to US$50 million in private investment needed to advance the pipeline through FEED before a final investment decision.

Environmental Concerns

The project has faced environmental opposition, particularly from Greenpeace and the Centre for Biological Diversity. Critics argue that the project could release more than 50 million metric tonnes of carbon pollution annually from exports, plus an additional 297 million metric tonnes from infrastructure operations over its 30-year lifespan.

Despite these challenges, AGDC President Frank Richards emphasises the project's potential benefits, including its ability to eliminate up to 2.3 billion tonnes of global emissions by replacing dirtier fuel sources with cleaner-burning natural gas. The project's proximity to Asian markets and superior economics are cited as key advantages.

Development Strategy

The development follows a phased approach, with Phase I prioritising pipeline construction to address Alaska's Cook Inlet energy crisis, while Phase II encompasses the infrastructure needed for LNG export operations. A formal announcement of definitive agreements is expected within months.

This private investment marks a significant shift from the project's previous government funding, which began after ExxonMobil, ConocoPhillips and BP withdrew in 2016 citing cost concerns. The project's advancement comes amid broader energy policy discussions, including President Biden's recent announcement of protections for portions of Alaska's Northern Bering Sea from future oil and gas leasing, a move that President-elect Trump has vowed to reverse.