On October 23, Alaska Department of Natural Resources (DNR) Commissioner John Crowther signed a proposed decision to convert two conditional right‑of‑way leases for the Alaska LNG project into full leases under AS 38.35.100(a). The leases – ADL 421296 for the Point Thomson Transmission Line and ADL 421297 for the 807‑mile mainline from the North Slope to Nikiski – were originally issued in 2021 with seven conditions that must be satisfied before conversion.

Background on the 2021 conditional leases

In January 2021, then‑Commissioner Corri Feige granted conditional leases that gave the Alaska Gasline Development Corporation (AGDC) up to ten years to demonstrate financial and technical capability, secure agreements for timber, water and construction materials, produce a project schedule, and execute both a Highway Use Agreement and a contaminated‑sites agreement. The leases run until 2031.

2026 decision and the seven conditions

The 2026 decision states that the leases “require AGDC to meet seven specific conditions before the leases may be converted,” yet also claims the conditions have been met. Critics note discrepancies in how two of the conditions – the Highway Use Agreement and the contaminated‑sites agreement – are being interpreted. The lease calls for a “fully executed” agreement, but the DNR record shows only a draft Highway Use Agreement and a letter from AGDC agreeing to a 2018 technical memorandum, which DNR has deemed sufficient.

On technical capability, the lease requires “Preliminary Design Documents.” DNR acknowledges that AGDC’s current Design Basis is not a full preliminary design package but finds it “sufficient for this stage of the lease to proceed to conversion.” The agency’s 2021 analysis had expected a full preliminary design before front‑end engineering and design began.

Financial capability under review

DNR relied on a confidential Department of Revenue analysis, an overview of Glenfarne’s energy assets, and publicly issued press releases as evidence of commercial arrangements. The decision cites non‑binding letters of intent from Asian buyers and a planned $50 billion capitalization by 8 Star Alaska LLC, but does not address the lease’s requirement for binding agreements or indemnification of the State.

The agency notes that the “fit, willing and able” test historically applied to private operators, but argues that AGDC’s statutory authority and its partnership with Glenfarne satisfy the standard for a public‑purpose entity. While this policy view has merit, the decision does not explain why the earlier, stricter standard is no longer being applied.

Where DNR’s position has solid footing

Some conditions do align with the lease language. The existing‑uses condition only requires letters of intent for the Little Troublesome Creek Campground and the Mainline Material Offloading Facility, and the schedule condition allows a general schedule before a final investment decision. Conversion does not authorize construction; separate Notices to Proceed are still required, and Section 13 of the lease bars any construction notice until AGDC delivers an unconditional performance guaranty.

Public participation and next steps

DNR posted notice of the conversion request on October 5. Written comments are due by 5 p.m. on Wednesday, November 25, the day before Thanksgiving, and public hearings are scheduled for November 23 (online) and November 24 (Anchorage). Stakeholders and Alaskans are encouraged to review the decision, submit comments, and attend the hearings to ensure the state’s interests and the public’s concerns are fully considered before the leases are made permanent.

Original reporting: Must Read Alaska (Anchorage) — read the source article.