Japan, South Korea and Taiwan are considering investing in a massive natural gas project in Alaska in an attempt to reach commercial agreements that all and President Donald Trump and avoid the high US tariffs in their exports.
Alaska has long sought to build an 800 mile pipe that crosses the state from the north slope in the Arctic circle to the cooking entrance in the south, where gas would cool in liquid for export to Asia. The project, with an amazing price that exceeds $ 40 billion, has been stuck on the drawing board for years.
Alaska LNG, as the project is known, shows new signs of life, with Trump promoting the project as a national priority. The secretary of the Treasury, Scott Besent, said earlier this month that the Liquefied Natural Gas Project (LNG) could play an important role in commercial negotiations with South Korea, Japan and Taiwan.
“We are thinking of a great LNG project in Alaska that South Korea, Japan [and] Taiwan is interested in financing and taking a substantial portion of taking the shot, “Besent told journalists on April 9, saying that such agreement would help fulfill Trump’s goal to reduce the United States trade deficit.
The State Petroleum and Gas Company of Taiwán CPC Corp. signed a letter of intent in March to buy six million metric tons of Alaska Lng, said Brendan Duval, CEO and founder of Glenfarne Group, the main developer of the project.
“You can imagine geopolitical improvements, either for rates or military reasons: Taiwan is really focused on that registered,” Duval told CNBC in an interview. CPC has also offered to invest directly in the LNG of Alaska and the supply team, Duval said.
March commercial mission
The governor of Duval and Alaska, Mike Dunleavy, traveled to South Korea and Japan on a commercial mission in March, meeting with high -ranking officials in government and industry. Japanese and South Korean companies have asked if their development banks can help finance Alaska LNG, Duval said.
“Lately, there have been many queens or investigations of India, so there is a fourth horse that entered the races,” Duval said. Thailand and other Asian countries have also shown interest, he said.
The Alaska LNG project has three main pieces: the pipe, a gas processing plant on the north slope and a plant to liquefy the gas to export in Nikiski, Alaska. It is estimated that these facilities cost approximately $ 12 billion, $ 10 billion and $ 20 billion respectively, Dunleavy said at an energy conference in Houston in March.
Alaska LNG permissions are already in place, said the CEO. Glenfarne hopes to reach a final investment decision in the next six to 12 months in the first phase of the project, a pipe from the northern slope to Anchorage that will supply gas for domestic consumption in Alaska, Duval said.
The construction of the LNG plant is expected to begin at the end of 2026, the CEO said. The objective is to complete the construction of the entire Alaska LNG project in four and a half years with full commercial operations from 2031, he said.
Alaska LL plans to produce 20 million metric tons of LNG per year, equal to approximately 23% of the 87 million tons of LNG that the US exported last year, according to Kpler data, a basic products researcher.
Unleash Alaska resources
Alaska plays a central role in Trump’s goal to boost US oil and gas exports, part of the White House agenda for the “energy dominance” of the United States. The president issued an executive order on his first day in the position that seeks to take advantage of the “Extraordinary Resources” of Alaska, prioritizing the development of LNG in the state.
“We will have that framed on our walls in Alaska for decades,” said Governor Dunleavy at the Houston conference last month, referring to the executive order.
Once a net importer, the United States has quickly become the largest LNG exporter in the world, playing an increasingly vital role in the food of electrical plants in Asia and Europe for allies with limited national energy resources. Japan and South Korea, for example, each touch around 8% or US exports of the USA last year, according to Kpler data.
The Trump administration sees Alaska LNG as “an important strategic project,” said Interior Secretary Doug Burgum, at the Houston Energy Conference. Alaska LNG exports would arrive in Japan in approximately eight days instead of having to go through the Panama Canal with the freezing of the terminals on the Gulf coast, Donleavy said at the same conference.
“They can have the opportunity to receive them the most efficient LNG of an ally partner,” while avoiding strangulation points, Duval said. “This is the only LNG that the United States can supply that it has a direct route, and they are very aware of that in the current environment.”
North Pacific Conversations
Trump told journalists a joint press conference with Japanese Prime Minister Shigeru Ishiba in February that the two countries were discussing the pipe and the possibility of a joint company to exploit oil and Alaska gas. Trump said he discussed the “large-scale purchase of US LL” in the phone call of April 8 with the interim president of South Korea, have Duck-Soo, and Korea’s participation in a “joint venture in an Alaska pipe.”
Japan wants to maintain its security agreement with the United States against a rising China and avoid tariffs, officials of the Alaska Industrial Development Authority and the Export Authority of the Finance Duration of the Senate of Alaska said. “Now we are in a completely ‘transactional’ commercial world,” executives said. Tokyo must invest more in the United States, buy more LNG and enter a joint company linked to oil and Alaska gas, they said.
The project would probably be structured as a loose joint company, with the Asian partners who sign contracts for large volumes of LNG, Duval said, and will not necessarily translate in Japan, Taiwan and South Korea with filling stakes to the possibility of tea, he said.
Genfarne’s goal is to be the owner and long -term operator of Alaska LNG with partners, Duval said. Glenfarne is a developer, owner and operator of a private hero of energy infrastructure based in New York and Houston City. The company assumed a 75% participation in Alaska LL of the Alaska Gasline Development Corporation in March, with AGDC maintaining 25%.
Obstacles and commercial viability
The Trump administration is clearly Japan pressure, South Korea and Taiwan to invest in Alaska LNG, said Bob McNally, president of Rapidan Energy and former energy advisor of President George W. Bush. Althegh Japan wants to placate Trump and diversify his LNG supplies, Tokyo can still hesitate to invest in Alaska LNG due to the cost, complexity and risk of the project, McNally said.
Another obstacle is that Democrats could return to power in 2028 and try to prevent the project from progressing, citing environmental effects, McNally said. President Joe Biden, after all, stopped the permits for new exports of LNG to countries, including Japan, which do not have free trade agreements with the United States, but Trump reversed the suspension of Biden as part of a torrent of executive orders linked to energy.
In addition to the political risk, Alaska LNG “does not have a clear commercial logic,” said Alex Munton, head of research of Gars E GNL Global in Rapidan. “If I did, I would have had much more support than it has had so far, and this project has a leg at the planning board for literally decades,” Munton said. There are more attractive existing LNG options for Asian customers on the Gulf coast, he said.
The project is ventive even for the standards of a LNG industry that builds part of the most expensive infrastructure in the energy sector, Munton said. The price of more than $ 40 billion must probably be reviewed up since he is two years old, said the analyst.
“It must assume that the costs will be much higher than publicly quoted figures,” Munton said. Alaska LNG will probably need “public policy or a public commitment of funds to give life,” said the analyst.
Duval said Alaska LNG will be competitive without a government subsidy. “It is a naturally competitive source of LNG, independent of geopolitical benefits, regardless of tariff discussions,” he said.
“We have the support of the president of the United States,” Dunleavy said in Houston. “We have Asian allies that need gas. Geopolitical alliances are changing. Tariff questions are emerging. When we really look at it in that context, it is a very viable project.”