Leak of confidential gasline deal shakes up special session, raises further questions about project’s future

Agreement may force state to pay ‘hundreds of millions, if not billions of dollars’ to company if it decides not to proceed with development of natural gas pipeline

A joint House-Senate conference committee hears a presentation about a proposed natural gas pipeline on Friday, June 26, 2026, at the Alaska State Capitol. (Mark Sabbatini / Juneau Independent)

By Mark Sabbatini

Juneau Independent

State lawmakers already under a tight self-imposed timeline for passing legislation aiding development of a natural gas pipeline are confronting new questions and doubts following the leak of a confidential draft agreement between a state-owned corporation and a private company that’s the project’s primary developer.

The draft, first reported by the Alaska Beacon on Thursday, states if Glenfarne Group LLC fails to proceed with the gasline as its primary developer the state may be required to pay to retake control of the project. The agreement is with the state-owned Alaska Gasline Development Corp., which owns 25% of the Alaska LNG Project while Glenfarne owns the other 75%.

Among the concerns are that if lawmakers give the project large tax breaks and other incentives sought by Glenfarne, the company will be able to ask for a higher "clawback" price because the incentives will give the gasline a higher market value. If AGDC and Glenfarne can’t agree on a price, an “independent investment bank” would be asked to determine the value.

"The potential value that we're talking about here is hundreds and hundreds of millions, if not billions of dollars," Sen. Bert Stedman, R-Sitka, said during a joint House-Senate conference committee meeting Friday to discuss proposed legislation to incentivize the gasline.

The joint committee was formed last Saturday at the opening of a second special session to consider such legislation, ordered by Gov. Mike Dunleavy when the first 30-day special session ended in a stalemate. Friday’s meeting was the committee’s first, with its six members attempting to craft a compromise bill that resolves differences before the House and Senate are scheduled to reconvene next Wednesday.

Among the issues dividing lawmakers are the amount of tax breaks to give the gasline’s developers, with Dunleavy favoring larger incentives than contained in a bill passed by the Senate. Some lawmakers also are worried about the state being asked to provide additional funding to complete the project if development or other costs exceed projections, and say they’ve gotten insufficient data from developers about the project’s potential costs, customers and earnings.

The leak of the secret draft agreement is adding to those concerns. At the same time, the disclosure dismayed officials supporting the gasline project who said it might cause Glenfarne and other natural resource developers to mistrust the state’s ability to keep information confidential.

"We're absolutely willing to continue to pursue the project — and we will," Adam Prestidge, president of the subsidiary Glenfarne Alaska LNG, told the joint committee. "It creates a little bit of a hesitation around business principles and how we will be able to trust certain confidentiality protections."

Prestidge said numerous potential partners in the project, such as prospective customers for buying gas from the pipeline, have contacted the company in recent weeks for details about what’s happening at the Alaska State Capitol.

"It's not an easy thing to explain that confidential preparation materials or brief materials from a state agency were leaked and ended up in the media, so it's not something that outside parties would find as a positive for conducting business in the state of Alaska," he said,

Matt Kissinger, an AGDC consultant, told the committee "It's noise to us, and absolutely we feel like it should just be left that way." But Stedman told Kissinger trying to gloss over the document doesn’t appear to be a practical option.

"One recommendation that you may want to consider, due to the volume of individuals that have that document, is to possibly redact some of the information in it and release it to the public," he said. "I don't see how you're going to pull it back."

Among the officials expressing strong criticism about the draft agreement is Senate Rules Chair Bill Wielechowski, D-Anchorage, who in a social media post Thursday stated it means information of questionable accuracy has been presented to lawmakers over the past several weeks.

"AGDC responded to this Alaska Beacon article by saying it's ‘disappointing’ the Legislature got this confidential document," he wrote. "I would suggest it was unfortunate AGDC never shared these details with the Legislature and misled the Legislature.

"Some in the Senate, including me, became aware of this confidential document and a number of our amendments were drafted to protect the State against a variety of scenarios. These are the amendments the Governor is now urging the Legislature to reject."

The Alaska Beacon reported Friday that AGDC held a virtual board meeting Thursday where it was announced an internal investigation has been launched into how the confidential document was shared. The article also reports AGDC board member Dennis Michel, in "tongue-in-cheek" remarks, likened state legislators to mosquitoes.

“A mosquito can turn a peaceful evening into a defensive operation," he said, according to the Beacon. "A Legislature can turn a straightforward issue into a long campaign of hearings, amendments, delays and procedural buzzing. Both are persistent, too. A mosquito can keep circling until it finds bare skin. Lawmakers circle around taxes, amendments, compromises until it finally lands, or at least until someone, everyone in the room, has been bitten by the process.”

Several legislators participated in the call, with Senate Majority Leader Cathy Giessel, R-Anchorage, telling the Beacon the remarks were “outrageously demeaning," and Rep. Donna Mears, D-Anchorage, calling them "not acceptable."

Sen. Lyman Hoffman, a Bethel Democrat who is co-chairing the joint conference committee, said during a break in Friday’s meeting he believes a bill can still be advanced for the full Legislature to consider by next Wednesday. He said he also doesn’t believe the leak of the draft agreement will be a serious hindrance to the passage of a bill.

The conference committee is scheduled to meet at 10 a.m. and again at 2 p.m. Saturday.

• Contact Mark Sabbatini at editor@juneauindependent.com or (907) 957-2306.