Glenfarne CEO says Alaska LNG financing hinges on tax legislation

As a special legislative session kicked off Thursday in Juneau, the developer of the Alaska LNG megaproject said it’s working toward completing the financing arrangements needed to make a final investment decision to move into construction.

Glenfarne chief executive Brendan Duval said that a decision on construction of the 800-mile pipeline, to deliver natural gas to Southcentral Alaska, could take place within four months.

But the financing is contingent in part on the Legislature approving a favorable tax agreement, he said, plus approval from the Regulatory Commission of Alaska for a gas purchase agreement with Enstar, Southcentral Alaska’s gas company, that’s still being finalized.

Duval provided the details in an interview and from the stage of the Alaska Sustainable Energy Conference on Thursday morning.

The Alaska LNG project proposes to pipe North Slope natural gas down to Southcentral Alaska, to provide gas to Alaskans in 2029 in the first phase, and next for Asian exports in 2031 as liquefied natural gas, or LNG. Its cost has been estimated at around $45 billion for the last decade.

Gov. Mike Dunleavy has called lawmakers into a special session with one objective: to pass legislation that would provide tax relief to support the project’s construction.

Negotiations on a measure that the governor favored broke down this week as the legislative session approached its final hours.

Lawmakers narrowly failed to approve a measure introduced by Alaska House Majority Leader Chuck Kopp, an Anchorage Republican, that would have eliminated property taxes for the project and replaced them with a much smaller tax on the gas.

Duval said the measure that failed was different from the governor’s original proposal, but it would have worked for Alaska LNG to receive financing.

It would be “a very tight financing, but a doable financing,” he said.

Duval said that representatives this week from “leading global project finance banks,” as well as leaders from many other companies involved in the project, were in Alaska to learn more and tour the Nikiski site where the gas would be exported to Asia.

The “banks have given me proposals on terms and conditions that allow me to say I can make a final investment decision here once we finish up some of these agreements, possibly this tax bill out of Juneau,” Duval said.

In Juneau this week, leaders of the Alaska House and Senate promised to take seriously the task of reaching agreement on a tax bill during the special session.

But they acknowledged it may be difficult to adhere to Dunleavy’s demands.

The tax bill will be reviewed by the House and Senate finance committees while most lawmakers return home to their districts. The full Legislature isn’t scheduled to meet until June 4.

“I look forward to the committee process in the finance committees of both bodies,” Kopp said. “I think we’ll get there. We’ve got some great minds on those finance committees. I think a very good vetting of that bill will occur, and I’m confident we’ll get consensus, and we’ll get a good bill to the governor.”

Senate Majority Leader Cathy Giessel, an Anchorage Republican who took a leading role in crafting competing gas line legislation in the Senate Resources Committee in recent weeks, said she thinks “the House and the Senate can definitely come to collaboration on the gas pipeline bill.”

But, she said, “it’ll be interesting to see if we can agree with and find the match with the governor’s requirements.”

House Speaker Bryce Edgmon said Wednesday that he was looking forward to hearing more from Glenfarne during the special session.

“We know so little about what actually Glenfarne is doing. We know so little. It’s all left to speculation, and I don’t care to speculate,” said Edgmon, a Dillingham independent.

Glenfarne has delayed making that final investment decision — the green light for project construction. The company had initially indicated it would be made in December.

Critics have pointed to the delays, and a lack of financial information from Glenfarne about the project, as signs that Alaska LNG won’t be built.

Glenfarne, based in New York, does not currently export LNG, though it’s working on smaller LNG export projects in Texas and Louisiana. A Glenfarne subsidiary is one of the largest importers of LNG into Colombia, the company says.

Glenfarne has said it hopes to start shipping the 42-inch pipe for the pipeline into Alaska this summer, and to start laying pipe in December.

Duval said Thursday that if the loans with lending institutions can be completed and the Regulatory Commission of Alaska approves an Enstar contract, the company can work on mobilizing contractors.

“What we’ve asked our contractors to be ready for is to be having their equipment up on the Slope and on the right of way in Q1 of next year in 2027,” he said referring to the first quarter between January and March.

That would set the stage to “have construction seasons going through ‘27 and ‘28 and have commissioning in ‘29 so we can deliver gas here through the pipeline late in 2029,” he said.

He said the company is working to turn preliminary agreements with gas suppliers and others, which spell out key terms and conditions, into final documents.

The company’s key preliminary agreements for gas supply are with Hilcorp, ExxonMobil and ConocoPhillips, the three major oil producers on the North Slope.

Duval said Glenfarne is a private company but is looking at options to share information with legislative committees during the special session while protecting confidentiality.

He said he’s optimistic the Legislature will approve tax legislation that supports the project.

Alaskans support Alaska LNG, he said, and the House came close to approving major legislation after just a short, two-month period following the introduction of the governor’s proposal.

“The amount of momentum and the pace that we got, I think we can get something sorted in this extended session,” he said.

The Daily News’ Alex DeMarban reported from Anchorage, and Iris Samuels reported from Juneau.