Governor Dunleavy Introduces Legislation to Advance Alaska LNG Project with Alternative Tax Structure - Mike Dunleavy
Archived: 2026-04-23 17:25
Governor Dunleavy Introduces Legislation to Advance Alaska LNG Project with Alternative Tax Structure - Mike Dunleavy
Skip to content
Facebook
Twitter
Instagram
Status of the Flag
You are here:
Home
/
Governor Dunleavy Introduces Legislation to Advance Alaska LNG Project with Alternative Tax Structure
Governor Dunleavy Introduces Legislation to Advance Alaska LNG Project with Alternative Tax Structure
Mar 20, 2026
SB 280
/
HB 381
modernizes oil and gas property tax structure to be more competitive among global LNG projects and deliver lowest cost to Alaskan customers
Governor Mike Dunleavy today transmitted legislation to the Alaska State Legislature replacing the existing oil and gas property tax structure for the Alaska Liquefied Natural Gas (AKLNG) Project with an alternative tax that is based on the volume of gas that moves through the pipeline rather than the assessed value of the pipeline itself.
The current tax structure levies a 20 mill annual property tax, equal to 2% of assessed infrastructure value. The current tax structure creates a burdensome fixed cost for the project in the first years when capital expenditures are greatest and revenue is minimal.
The governor’s proposed legislation removes the front-end tax burden and aligns the taxes with production. That derisks the project for investors and creates a more predictable revenue stream that is objective based on volume and rather than tied to property tax assessments that are inherently subjective and would be repeatedly contested. This tax structure also benefits rate payers in Alaska, as the upfront costs the current property tax imposes would be passed on to customers.
“The Alaska LNG Project is one of the most significant economic opportunities in our state’s history. This legislation removes a structural barrier that was standing between Alaska and decades of energy security, jobs, and revenue,”
said Governor Dunleavy
.
The legislation creates a phased tax structure consistent with international LNG investment norms:
Construction through first gas:
Exempt from state and municipal property taxes, consistent with current law.
Ramp-up period:
Property tax held in abeyance from commencement of commercial operations until the project reaches 1 billion cubic feet per day (averaged over 30 consecutive days) or 10 years, whichever comes first.
Full operations:
An alternative volumetric tax of $0.06 per thousand cubic feet of throughput, increasing one percent annually.
Governor Dunleavy, his administration and Glenfarne, the lead developer for the AK LNG project, extensively engaged with local elected officials prior to the introduction of the legislation.
Revenue is allocated between the state and municipalities based on the share of infrastructure within each jurisdiction. The Alaska Department of Revenue estimates the legislation can raise more than $26 billion in tax and royalty revenue over 30 years, including more than $22 billion in state revenue nearly $4 billion in local revenue.
If commercial operations have not begun by January 1, 2040, the alternative tax structure terminates and the standard property tax is restored.
“We have a constitutional mandate to develop our natural resources for the maximum benefit of the people. The benefit of the LNG pipeline isn’t just revenue to government coffers, but more importantly it includes affordable and abundant energy for Alaskans. That attracts new industry, it makes it cheaper to operate schools, and creates new jobs,”
Governor Dunleavy added
. “By taxing based on the volume of gas that flows through the pipeline, we are ensuring that Alaska receives its fair share of the resource.”
ABOUT THE AKLNG PROJECT
AKLNG would bring North Slope natural gas to Alaskan communities and global markets via a 807-mile pipeline, North Slope gas treatment facility, and Cook Inlet LNG export terminal. The project would lower long-term energy costs for Alaska families, generate thousands of jobs, and unlock the economic potential of North Slope gas resources currently reinjected or stranded.
Search
Recent News
Governor Dunleavy Welcomes $115.4 Million Federal Port Grants for Alaska
April 22, 2026
Medical Laboratory Professionals Week 2026
April 19, 2026
Crime Victims’ Rights Week 2026
April 19, 2026
Public Safety Telecommunicators Week 2026
April 12, 2026
Flood Preparedness Week 2026
April 12, 2026
Recent News
April 2026
March 2026
February 2026
January 2026
December 2025
November 2025
October 2025
September 2025
August 2025
July 2025
June 2025
May 2025
April 2025
March 2025
February 2025
January 2025
December 2024
November 2024
October 2024
September 2024
August 2024
July 2024
June 2024
May 2024
April 2024
March 2024
February 2024
January 2024
December 2023
November 2023
October 2023
September 2023
August 2023
July 2023
June 2023
May 2023
April 2023
March 2023
February 2023
January 2023
December 2022
November 2022
October 2022
September 2022
August 2022
July 2022
June 2022
May 2022
April 2022
March 2022
February 2022
January 2022
December 2021
November 2021
October 2021
September 2021
August 2021
July 2021
June 2021
May 2021
April 2021
March 2021
February 2021
January 2021
December 2020
November 2020
October 2020
September 2020
August 2020
July 2020
June 2020
May 2020
April 2020
March 2020
February 2020
January 2020
December 2019
November 2019
October 2019
September 2019
August 2019
July 2019
June 2019
May 2019
April 2019
March 2019
February 2019
January 2019
December 2018
State of Alaska
myAlaska
Departments
Employees
COPYRIGHT © STATE OF ALASKA
State of Alaska & Office of the Governor
Email the Website Manager
The owner of this website has made a commitment to accessibility and inclusion, please report any problems that you encounter using the contact form on this website. This site uses the WP ADA Compliance Check plugin to enhance accessibility.
Skip to content
Status of the Flag
You are here:
Home
/
Governor Dunleavy Introduces Legislation to Advance Alaska LNG Project with Alternative Tax Structure
Governor Dunleavy Introduces Legislation to Advance Alaska LNG Project with Alternative Tax Structure
Mar 20, 2026
SB 280
/
HB 381
modernizes oil and gas property tax structure to be more competitive among global LNG projects and deliver lowest cost to Alaskan customers
Governor Mike Dunleavy today transmitted legislation to the Alaska State Legislature replacing the existing oil and gas property tax structure for the Alaska Liquefied Natural Gas (AKLNG) Project with an alternative tax that is based on the volume of gas that moves through the pipeline rather than the assessed value of the pipeline itself.
The current tax structure levies a 20 mill annual property tax, equal to 2% of assessed infrastructure value. The current tax structure creates a burdensome fixed cost for the project in the first years when capital expenditures are greatest and revenue is minimal.
The governor’s proposed legislation removes the front-end tax burden and aligns the taxes with production. That derisks the project for investors and creates a more predictable revenue stream that is objective based on volume and rather than tied to property tax assessments that are inherently subjective and would be repeatedly contested. This tax structure also benefits rate payers in Alaska, as the upfront costs the current property tax imposes would be passed on to customers.
“The Alaska LNG Project is one of the most significant economic opportunities in our state’s history. This legislation removes a structural barrier that was standing between Alaska and decades of energy security, jobs, and revenue,”
said Governor Dunleavy
.
The legislation creates a phased tax structure consistent with international LNG investment norms:
Construction through first gas:
Exempt from state and municipal property taxes, consistent with current law.
Ramp-up period:
Property tax held in abeyance from commencement of commercial operations until the project reaches 1 billion cubic feet per day (averaged over 30 consecutive days) or 10 years, whichever comes first.
Full operations:
An alternative volumetric tax of $0.06 per thousand cubic feet of throughput, increasing one percent annually.
Governor Dunleavy, his administration and Glenfarne, the lead developer for the AK LNG project, extensively engaged with local elected officials prior to the introduction of the legislation.
Revenue is allocated between the state and municipalities based on the share of infrastructure within each jurisdiction. The Alaska Department of Revenue estimates the legislation can raise more than $26 billion in tax and royalty revenue over 30 years, including more than $22 billion in state revenue nearly $4 billion in local revenue.
If commercial operations have not begun by January 1, 2040, the alternative tax structure terminates and the standard property tax is restored.
“We have a constitutional mandate to develop our natural resources for the maximum benefit of the people. The benefit of the LNG pipeline isn’t just revenue to government coffers, but more importantly it includes affordable and abundant energy for Alaskans. That attracts new industry, it makes it cheaper to operate schools, and creates new jobs,”
Governor Dunleavy added
. “By taxing based on the volume of gas that flows through the pipeline, we are ensuring that Alaska receives its fair share of the resource.”
ABOUT THE AKLNG PROJECT
AKLNG would bring North Slope natural gas to Alaskan communities and global markets via a 807-mile pipeline, North Slope gas treatment facility, and Cook Inlet LNG export terminal. The project would lower long-term energy costs for Alaska families, generate thousands of jobs, and unlock the economic potential of North Slope gas resources currently reinjected or stranded.
Search
Recent News
Governor Dunleavy Welcomes $115.4 Million Federal Port Grants for Alaska
April 22, 2026
Medical Laboratory Professionals Week 2026
April 19, 2026
Crime Victims’ Rights Week 2026
April 19, 2026
Public Safety Telecommunicators Week 2026
April 12, 2026
Flood Preparedness Week 2026
April 12, 2026
Recent News
April 2026
March 2026
February 2026
January 2026
December 2025
November 2025
October 2025
September 2025
August 2025
July 2025
June 2025
May 2025
April 2025
March 2025
February 2025
January 2025
December 2024
November 2024
October 2024
September 2024
August 2024
July 2024
June 2024
May 2024
April 2024
March 2024
February 2024
January 2024
December 2023
November 2023
October 2023
September 2023
August 2023
July 2023
June 2023
May 2023
April 2023
March 2023
February 2023
January 2023
December 2022
November 2022
October 2022
September 2022
August 2022
July 2022
June 2022
May 2022
April 2022
March 2022
February 2022
January 2022
December 2021
November 2021
October 2021
September 2021
August 2021
July 2021
June 2021
May 2021
April 2021
March 2021
February 2021
January 2021
December 2020
November 2020
October 2020
September 2020
August 2020
July 2020
June 2020
May 2020
April 2020
March 2020
February 2020
January 2020
December 2019
November 2019
October 2019
September 2019
August 2019
July 2019
June 2019
May 2019
April 2019
March 2019
February 2019
January 2019
December 2018
State of Alaska
myAlaska
Departments
Employees
COPYRIGHT © STATE OF ALASKA
State of Alaska & Office of the Governor
Email the Website Manager
The owner of this website has made a commitment to accessibility and inclusion, please report any problems that you encounter using the contact form on this website. This site uses the WP ADA Compliance Check plugin to enhance accessibility.