Japan, South Korea and Taiwan are planning to invest in a massive natural gas project in Alaska in order to conclude trade agreements that would both meet the requests of President Donald Trump and would avoid high American export prices.
Alaska has long sought to build an 800 mile pipeline crossing the state of the northern slope in the Arctic circle to the entrance to the cook to the south, where the gas would be cooled in cash for export to Asia. The project, with an amazing price exceeding $ 40 billion, has been stuck on the drawing board for years.
Alaska LNG, As the project is known, shows new signs of life – Trump praising the project as a national priority. The Treasury Secretary, Scott Bessent, said earlier this month that the liquefied natural gas project (LNG) could play an important role in trade negotiations with South Korea, Japan and Taiwan.
“We are thinking of a large LNG project in Alaska that South Korea, Japan (and) Taiwan are interested in finance and taking a substantial part of the absence,” said Bessent to journalists on April 9, saying that such an agreement would help achieve Trump's goal to reduce the American trade deficit.
The Taiwan oil and gas company, CPC Corp. Glenfarne groupthe main developer of the project.
“You can imagine geopolitical improvements, whether for pricing or military reasons – Taiwan is really, really focused on registering,” Duval at CNBC told an interview. CPC also proposed to invest directly in LNG and supply equipment in Alaska, said Duval.
MARCH COMMERCIAL Mission
The Governor of Duval and Alaska, Mike Dunleavy, went to South Korea and Japan during a commercial mission in March, meeting high -ranking officials from government and industry. Japanese and South Korean companies have asked whether their development banks can help finance Alaska LNG, said Duval.
“Lately, there have been many requests from India, so there is a fourth horse that has entered the race,” said Duval. Thailand and other Asian countries have also expressed their interest, he said.
The LNG project in Alaska has three main parts: the pipeline, a gas treatment plant on the northern slope and a factory to liquidate the gas for export to Nikiski, Alaska. These facilities are expected to cost around $ 12 billion, $ 10 billion and $ 20 billion respectively, Dunleavy said at an energy conference in Houston in March.
Alaska GNL permits are already in place, said the CEO. Glenfarne plans to make a final investment decision in the next six to 12 months on the first phase of the project, a northern slope pipeline with anchor that will provide gas for interior consumption in Alaska, said Duval.
The construction of the LNG factory should start at the end of 2026, said the CEO. The objective is to complete the construction of the entire LNG project in Alaska in four and a half years with complete commercial operations from 2031, he said.
Alaska LNG plans to produce 20 million metric tonnes of LNG per year, or around 23% The 87 million tonnes of LNG that the United States exported last yearAccording to KPLER data, researcher in terms of raw materials.
Release Alaska resources
Alaska plays a central role in Trump's goal to stimulate the production and exports of American oil and gas, part of the White House agenda for us “energy dominance”. The president published a decree on the first day at the office seeking to exploit Alaska “Extraordinary resources potential“Prayer the development of LNG in the state.
“We will have what has been supervised on our walls in Alaska for decades,” said Governor Dunleavy at the Houston conference last month, referring to the decree.
Once a net importer is, the United States has quickly become the largest LNG exporter in the world, playing an increasingly vital role in the food of power plants in Asia and Europe for allies with limited interior energy resources. Japan and South Korea, for example, each took around 8% of American LNG exports last year, according to KPLER data.
The Trump administration considers that Alaska GNL as “an important strategic project,” said interior secretary Doug Burgum at the Houston Energy conference. Alaska LNG exports would reach Japan in about eight days rather than having to go through the Panama Canal congestioned from terminals on the Gulf coast, Dunleavy said at the same conference.
“They may have the opportunity to deliver the most effective LNG of an allied partner,” while avoiding strangulation points, said Duval. “It is the only LNG that the United States can provide that has a direct route, and it is very aware on this subject in today's environment.”
North Pacific talks
Trump told journalists for a Joint press conference With Japanese Prime Minister Shigeru Ishiba, in February, the two countries discussed pipeline and the possibility of a joint venture to exploit oil and gas from Alaska. Trump said he had discussed “the large -scale purchase of American LNG” in a April 8 Telephone call With the acting president of South Korea, Han Duck-Soo, and the participation of Korea in a “joint venture in an Alaska pipeline”.
Japan wants to maintain its security agreement with the United States against a rise in China and avoid prices, said Alaska Industrial Development and Exports officials Alaska Authority February presentation. “We are now in a completely” transactional world “,” said the leaders. Tokyo has to invest more in the United States, buy more LNG and enter a joint venture linked to Alaska oil and gas, they said.
The project would probably be structured as a loose joint venture, with Asian partners signing contracts for large LNG volumes, said Duval, and will not necessarily result in Japan, Taiwan and South Korea holding direct actions in Alaska GNL, although Glenfarne is open to the possibility.
Glenfarne’s goal is to be the long -term owner and operator of Alaska LNG with partners, said Duval. Glenfarne is a developer, owner and operator deprived of energy -based energy infrastructure and Houston. The company has assumed a 75% stake in the ALASKA LNG Alaska Gasline Development Corporation In March, Agdc keeping 25%.
Obstacles and commercial viability
The Trump administration clearly puts pressure on Japan, South Korea and Taiwan to invest in the LNG in Alaska, said Bob McNally, president of Rapid And former energy advisor to President George W. Bush. Although Japan wants to both appease Trump and diversify his LNG supplies, Tokyo could still hesitate to invest in Alaska LNG due to the cost, complexity and risk of the project, said McNally.
Another obstacle is that Democrats could return to power in 2028 and try to prevent the project from advancing, citing environmental effects, said McNally. President Joe Biden, after all, interrupted permits for new LNG exports to countries such as Japan which have no free trade with the United States, but Trump reversed Biden's suspension as part of a torrent of energy-related decrees on his first day of power in January.
In addition to political risks, Alaska LNG “has no clear commercial logic,” said Alex Munton, responsible for global gas and LNG in Rapidan. “If that was the case, he would have had much more support than so far, and this project has been part of the town planning council for decades,” said Munton. There are more attractive LNG options for Asian customers on the Gulf coast, he said.
The project is expensive even according to the standards of a LNG industry which builds some of the most expensive infrastructure in the energy sector, said Munton. The price of more than $ 40 billion must probably be revised upwards since it is two yearssaid the analyst.
“You should assume that the costs will be much higher than the figures cited publicly,” said Munton. Alaska LNG will likely need “public policy or a public commitment to bring it back,” said the analyst.
Duval said the Alaska LNG would be competitive without government grant. “This is a naturally competitive source of LNG, regardless of the geopolitical advantages, regardless of tariff discussions,” he said.
“We have the support of the President of the United States,” Dunleavy told Houston. “We have Asian allies who need gas. Geopolitical alliances change. Tariff questions to come. When we really look at him in this context, this is a very viable project.”
