Alaska’s Conflicting LNG Plans: Imports Now, Exports Later

Originally published for customers June 26, 2026.

What’s the issue?

Alaska is an outlier from the rest of the United States both literally and figuratively, separated from the country by about 500 miles of Canadian land. The state’s relationship with natural gas only amplifies that distinction.

Why does it matter?

Like many states, Alaska faces a potential natural gas supply shortfall in the near future even though it holds ample gas reserves.

What’s our view?

A combination of temporary LNG imports in the short term and significant pipeline construction to unlock the North Slope’s largely untouched reserves is needed to keep the state reliable and bring prices down to affordable levels.

Alaska LNG imports and exports are advancing on parallel tracks, and they point in opposite directions. The state sits on some of the largest conventional gas reserves in the world yet risks running short within the decade as Cook Inlet production declines. This post breaks down why, what Trans-Foreland’s proposed import terminal and the Glenfarne-led Alaska LNG export project each aim to solve, and where each one stands in permitting and construction.

Why Alaska’s Natural Gas Demand Looks Nothing Like the Lower 48

Alaska has not seen the steady rise in natural gas production and consumption present across the rest of the United States since 2000. Unlike the rest of the country, Alaska has always relied heavily on in-state gas for both home heating and electricity, and the vast majority of its power generation has come from natural gas since before 2000. Alaska’s total gas consumption rose only 7% from 2000 to 2024, held down in part by a steady decline in annual consumption through 2010. Over the same period, total U.S. gas consumption rose 42%.

Across almost every sector, Alaska’s consumption profile diverges from the national picture. The industrial gap is the starkest: from 2015 to 2024, Alaska’s industrial gas consumption rose over 1,000%, while U.S. industrial consumption rose 14% in the same window.

Where Alaska’s Gas Comes From: Cook Inlet Decline and the Untapped North Slope

Alaska’s gas supply and demand are contained entirely within the state’s borders. Its reserves split between Cook Inlet and the North Slope. For decades, existing transmission has carried Cook Inlet gas inland to the Anchorage area, where most Alaskans live, and excess gas was liquefied and exported from the Kenai LNG facility in Nikiski.

Cook Inlet production has generally declined since 2000. Kenai suspended operations and exported its last LNG cargo in 2019. The situation could soon turn dire: Alaska’s Department of Natural Resources estimates local gas demand will structurally outpace Cook Inlet production capacity as early as 2032.

The North Slope is one of the largest conventional gas resource areas in the world, and in sharp contrast to Cook Inlet its reserves remain largely untouched. The only way North Slope gas currently moves south is trucked as LNG across more than 800 miles, which is impractical in normal conditions and effectively impossible against Alaska’s harsh winters with no other immediate alternative.

Two opposing solutions are in development. Converting the existing Trans-Foreland LNG facility from export to import should ease the short-term crunch. Longer term, the proposed Alaska LNG export terminal could unlock the North Slope’s ample reserves and position the state as a global LNG player.

Two Opposing Fixes: Alaska LNG Imports and Exports

The near-term and long-term answers to Alaska’s supply gap are moving on separate tracks and separate timelines.

Trans-Foreland: Converting a Shuttered Export Plant to LNG Imports

Trans-Foreland’s Kenai LNG terminal was built in 1967 and sits about 50 miles south of Anchorage. The plant was placed into “warm idle” status after its final export cargo. In 2019, Trans-Foreland applied at FERC to restart and convert part of the facility to deliver the equivalent of 0.03 MTPA (million tons per annum) to a nearby refinery, anticipating first cargo about a year after approval and targeting August 2020. Commercial constraints following the COVID-19 pandemic kept the conversion from ever starting.

Early this year, Trans-Foreland filed to amend that authorization, revising its construction plans and raising planned import capacity to 0.4 MTPA. The company stated that approval by July 31, 2026 would let construction finish as early as 2027, quelling near-term supply concerns.

The project is already behind in permitting. FERC only recently began preparing the associated Environmental Assessment (EA), with the final EA scheduled for October, which points to final approval landing roughly six months after the developer’s requested date. It is the same EA-driven timeline pressure Arbo tracked in Same Site, New Clock: The New Plaquemines Expansion.

Alaska LNG: A 20 MTPA Export Bet on North Slope Gas

The Alaska LNG facility’s proposed 20 MTPA export capacity looks outsized against a state that expects to struggle to meet its own demand. The terminal cannot operate without its associated 800-mile pipeline. If built, that line would unlock the North Slope’s ample reserves and carry far more than enough to serve in-state demand and beyond.

Development has largely stalled. Arbo has followed Alaska LNG for more than a decade, and when we first wrote about it in A Whole New Beast — Alaska LNG, we flagged several red flags, chief among them a $40 to $45 billion price tag. FERC issued the project’s certificate in 2020, and while the pipeline and LNG world has changed since, as we covered in From Paper to Pipe, little about the project itself has.

Until February of this year, when an implementation plan was filed for the pipeline’s first phase, the project showed no forward progress despite holding all major federal authorizations. Monthly status reports have followed regularly, but no request to begin construction has been filed.

Around the same time, developer Glenfarne Group began signaling serious intent to reach a final investment decision (FID). Glenfarne is now seeking offtake for an additional 3 MTPA on top of existing commitments for 13 MTPA, and because the state of Alaska holds a 25% financial stake, negotiations with the state are ongoing. Glenfarne most recently estimated the project will cost between $44.5 billion and $54.5 billion, roughly $10 billion above the initial high-end estimate. Because many recent LNG terminals have seen substantial cost overruns, legislators worry the state, or worse the consumer, will cover the difference.

Why the Pipeline Now Comes First

Amid the supply concerns, Glenfarne made one quiet but significant change to the development schedule. As originally proposed, terminal construction was to begin about six months before the pipeline. Now the pipeline is Phase I, targeted for service in early 2029, with terminal construction starting about a year after pipeline construction begins as part of Phase II.

Many of the negotiations with the state remain confidential. If and when a final decision comes, it will be worth watching whether the schedule change was one of the concessions made to put Alaska’s in-state needs first.

Alaska LNG Imports and Exports: Key Questions

Why is Alaska facing a natural gas shortage if it has large reserves?

Alaska’s gas comes almost entirely from Cook Inlet, whose production has declined since 2000. The state’s Department of Natural Resources estimates Cook Inlet output will structurally fall short of local demand as early as 2032, while the larger North Slope reserves stay stranded without a pipeline south.

What is the Trans-Foreland LNG import project?

Trans-Foreland proposes converting its idled Kenai LNG export terminal near Nikiski into an LNG import facility of up to 0.4 MTPA. It filed an amended FERC application early in 2026, and if approved by July 31, 2026, construction could finish as early as 2027 to cover near-term shortfalls.

What is the Alaska LNG export project and who is building it?

Alaska LNG is a proposed 20 MTPA export terminal in Nikiski paired with an 800-mile pipeline from the North Slope. Developer Glenfarne Group is pursuing a final investment decision, and the state of Alaska holds a 25% stake. Glenfarne now estimates the project at $44.5 billion to $54.5 billion.

Why is Alaska LNG building the pipeline before the export terminal?

Glenfarne restructured the project so the pipeline is built first, in Phase I, targeted for service in early 2029, with the export terminal following about a year later in Phase II. The change prioritizes delivering North Slope gas to Alaskans before pursuing exports.

If you would like to discuss Alaska’s natural gas supply gap or the outlook for Alaska LNG imports and exports, please contact us.