Committee weighs LNG import costs versus AKLNG pipeline pricing

John Sims walked the committee through the arithmetic comparing commodity prices and infrastructure charges for different supply options.

He said international spot benchmarks (JKM) were near $18/MMBtu at the time and that import infrastructure, shipping and onshore handling could add roughly $3–$5/MMBtu plus an additional $1/MMBtu or more for storage, creating an all‑in LNG import range of about $16–$22/MMBtu. By contrast, Sims said the AKLNG pipeline price under negotiation has been discussed at about $16/MMBtu subject to an annual inflation factor; he cautioned that nothing was finalized and that the negotiated contracts include terms, indexation and volatility protections.

Sims also gave an example of what customers pay delivered today after contract blending and distribution charges: "...that results in a weighted average cost of gas of about $10.80 is what our customers are paying, today." He told senators that a $16/MMBtu supply combined with an EnStar delivery charge (about $3/Mcf, per EnStar) would yield roughly $19 delivered per MCF in Anchorage in short‑term purchases.

Senators focused on volatility and reopeners: long‑term LNG commodity contracts often include premiums to compensate sellers for volatility, and Sims said that reopening mechanisms (periodic renegotiation clauses) can be negotiated into contracts to allow reductions if market conditions improve. The committee did not make a pricing determination; members asked that EnStar continue to provide comparative analysis to the RCA and the committee as negotiations progress.