Consultant warns Senate Finance that Alaska LNG faces megaproject risks

A consultant hired by the Senate Finance Committee told lawmakers Tuesday that Alaska LNG faces the same severe cost overruns and schedule delays that have hit comparable megaprojects worldwide — another skeptical data point in a Senate review that has consistently surfaced concerns about the project's financing and structure.

Jeremy Clark of Pegasus Global Holdings cited Ernst & Young research finding 92% of megaprojects exceed budget, schedule, or both. For LNG projects specifically, 67% face cost overruns averaging 70% above budget, and 68% run into schedule delays. Pipelines average 41% above initial estimates. The Alaska Gasline Development Corp. published an updated $38.7 billion cost estimate for Alaska LNG in 2025, which AGDC describes as a reduction from the prior $44.2 billion estimate from 2015.

Clark walked the committee through recent comparable projects. The Trans Mountain expansion in Canada hit $34 billion at completion in spring 2024 against an original $5.4 billion estimate — a 530% overrun. The Mountain Valley Pipeline in West Virginia reached $9 billion against an initial $3.5 billion estimate. The Atlantic Coast Pipeline was canceled in 2020 after $3.5 billion in sunk costs once projected costs reached $8 billion from an initial $4.5 billion.

Clark questioned whether Alaska LNG's phased approach — building the 800-mile pipeline before the gas treatment plant and LNG export terminal — actually reduces risk. Pipeline economics depend on LNG export revenue, he said, asking whether "phase one is financeable on a standalone basis" if costs aren't fully recovered by phase one customers. AGDC's project materials describe the phased approach as a way to reduce initial capital exposure.

Although Clard also balanced his risk analysis with a counterexample. The Vogtle nuclear plant in Georgia, he said, "ended up at roughly $36 billion and took, I believe it was seven years longer than planned to complete" but now powers more than 2 million homes.

Sen. Bert Stedman, R-Sitka, framed a structural concern, saying Alaska LNG represents "complete misalignment" from a statutory framework written for a project with three major oil companies and the state holding equal 25% partnerships — far from the current configuration. "We even offered months ago or asked what statutes need to be changed to start rectifying the alignment issue. And we were told nothing, nothing needs to be changed, which is complete hogwash."

The hearing fits a broader political picture Alaska News has been tracking. The Senate Finance Committee has held multiple sessions on the project, including earlier testimony that Alaska LNG's property-tax structure could itself render the project unfinanceable. Meanwhile, the Trump administration has explicitly endorsed Alaska LNG, and Cook Inlet's documented natural gas decline has given Southcentral utilities new urgency in identifying long-term supply — a context AGDC has used in its case for moving forward.