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Japan, South Korea, and Taiwan are actively exploring financial involvement in a significant natural gas initiative in Alaska as part of strategies to secure trade agreements that align with President Donald Trump’s trade agendas and minimize potential tariffs on their exports.
The proposed endeavor, which envisions an 800-mile pipeline from the North Slope in the Arctic to Cook Inlet in southern Alaska, aims to liquefy natural gas for shipment to Asian markets. Despite the project being bogged down for several years, it is now revitalized with a projected cost exceeding $40 billion.
Alaska LNG is gaining traction, positioned as a national priority by the Trump administration. Treasury Secretary Scott Bessent noted the liquefied natural gas (LNG) project could be pivotal in trade negotiations with Pacific allies, expressing optimism about potential financing from these countries.
“We’re contemplating a large LNG venture in Alaska that South Korea, Japan, and Taiwan are keen to support financially and secure sizable off-take agreements,” Bessent stated, linking this effort to Trump’s goal of reducing the U.S. trade deficit.
Taiwan’s state oil and gas entity, CPC Corp., has already signed a letter of intent in March to procure six million metric tons of LNG from the Alaska project, according to Brendan Duval, CEO of Glenfarne Group, which is leading the development of the initiative.
“Taiwan is extremely focused on finalizing this agreement, given the broader geopolitical implications, whether regarding tariffs or military cooperation,” Duval commented in an interview, adding that CPC is also evaluating direct investment in Alaska LNG.
March Trade Mission
In March, Duval and Alaska Governor Mike Dunleavy embarked on a trade mission to South Korea and Japan, conversing with senior officials about financing possibilities for Alaska LNG. Many businesses showed interest in whether their development banks could assist in funding.
Duval observed a rise in inquiries from India and other Asian nations, indicating broad regional interest in the project.
The Alaska LNG project encompasses three key components: the pipeline, a gas processing facility at the North Slope, and a liquefaction plant located in Nikiski, Alaska. According to Dunleavy, estimated costs for these facilities are around $12 billion for the pipeline, $10 billion for the processing plant, and $20 billion for liquefaction.
The necessary permits for the Alaska LNG project are already secured, and Glenfarne anticipates a final investment decision on the initial phase—a pipeline from the North Slope to Anchorage—within the upcoming six to twelve months. This initial segment aims to cater to domestic gas consumption within Alaska.
Construction of the LNG facility is slated to commence in late 2026, with an ambitious target to conclude the entire Alaska LNG project within four and a half years, aiming for full commercial operations by 2031.
The project plans to generate 20 million metric tons of LNG annually, which constitutes about 23% of the U.S.’s LNG exports last year, as per data from Kpler, a commodities research firm.
Unlocking Alaskan Resources
Alaska is pivotal in the Trump administration’s vision to amplify U.S. oil and gas production, encapsulated in the quest for “energy dominance.” On his first day in office, Trump signed an executive order seeking to leverage Alaska’s “extraordinary resource potential,” emphasizing LNG development.
“That executive order will remain significant for Alaska for years to come,” remarked Governor Dunleavy at an energy conference in Houston last month.
The U.S. has transitioned from a net importer to the world’s largest LNG exporter, becoming instrumental in supplying energy to nations in Asia and Europe that lack adequate domestic resources. Both Japan and South Korea accounted for approximately 8% of U.S. LNG exports last year, according to Kpler.
Interior Secretary Doug Burgum described Alaska LNG as a “strategic project.” The geographical advantage for Alaska’s exports is notable; shipments to Japan could reach their destination in about eight days, bypassing the congested Panama Canal routes utilized by other U.S. LNG exports from the Gulf Coast.
“This provides them the chance to receive highly efficient LNG from a valued ally while evading choke points,” Duval said, highlighting the uniqueness of this supply route amidst current geopolitical climates.
Diplomatic Engagements in the North Pacific
During a joint press conference with Japanese Prime Minister Shigeru Ishiba, Trump indicated discussions about the pipeline and potential collaborations to exploit Alaska’s resources. In a recent call with South Korea’s acting President Han Duck-Soo, Trump also addressed the large-scale U.S. LNG purchases and the concept of a joint venture for the Alaska pipeline.
Japan’s interest in fostering its security alliance with the U.S. and averting tariffs is driving these discussions, as officials from the Alaska Industrial Development and Export Authority relayed to the Alaska Senate finance committee during a presentation. They emphasized a need for Japan to invest further in the U.S., procure more LNG, and seek partnerships in Alaska’s oil and gas ventures.
The project could likely function as a loosely structured joint venture, allowing Asian partners to commit to large LNG purchase contracts. However, direct equity stakes in Alaska LNG may not be guaranteed, although Glenfarne is receptive to this possibility.
Glenfarne expresses a desire to take on the role of long-term operator and owner of Alaska LNG alongside strategic partners. The firm recently acquired a 75% share of the project from the Alaska Gasline Development Corporation, which retains a 25% interest.
Challenges and Economic Viability
The Trump administration appears to be pressuring Japan, South Korea, and Taiwan to invest in Alaska LNG, noted Bob McNally, president of Rapidan Energy and a former energy advisor to President George W. Bush. While Japan aims to satisfy U.S. expectations and diversify its LNG sources, there are hesitations stemming from the project’s substantial cost, complexity, and associated risks.
There is also concern that a potential change in U.S. administration could hinder the project’s progress, especially with criticism likely targeted at its environmental impact. Following his inauguration, President Joe Biden restricted permits for new LNG exports to countries without trade agreements with the U.S. Yet, Trump rapidly reversed this policy on his first day in office.
Beyond political hurdles, Alaska LNG lacks straightforward commercial viability, according to Alex Munton, head of global gas and LNG research at Rapidan. “If it had a compelling commercial rationale, it would have attracted more backing by now,” Munton remarked, noting that the project has been in development for decades. He also pointed out that more appealing, existing LNG supply chains from the Gulf Coast might dissuade Asian buyers.
The project is considered costly, even within an LNG sector that often undertakes expensive infrastructure projects. Analysts suggest that the budget exceeding $40 billion may require updating upward due to rising expectations of expenses linked to the lengthy planning phase.
“It is prudent to assume that costs will likely exceed previously stated estimates,” Munton observed, suggesting that substantial public policy support or funding commitments may be necessary to realize the project.
Despite these concerns, Duval maintains confidence in Alaska LNG’s competitiveness without governmental aid. “This is an inherently competitive LNG source, independent of geopolitical considerations,” he insists.
“Support from the U.S. president and the demand for gas from our Asian partners illustrate a shifting landscape in geopolitical alliances,” Dunleavy summed up in his remarks in Houston. “When framed in that context, Alaska LNG appears to be a viable project.”
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