Japan, South Korea and Taiwan are considering investing in a huge natural gas project in Alaska, trying to reach commercial transactions that would both satisfy President Donald Trump and avoid high American tariffs for their export.
Alaska has long been trying to build an 800-kilometer pipeline exceeding the condition from the northern slope in the Arctic district to the chef's inlet in the south, where gas would be liquid for export to Asia. The project, with a stunning price of $ 40 billion, has been stuck on a drawing board for years.
Alaska LNG, As the project is known, it shows new signs of life – with Trump advertising the project as a national priority. Treasury Secretary Scott Bessent said at the beginning of this month that the project of flowing natural gas (LNG) may play an important role in commercial negotiations with South Korea, Japan and Taiwan.
“We are thinking about a large LNG project in Alaska that South Korea, Japan (I) Taiwan is interested in financing and making a significant part of deprivation,” Bessent told journalists on April 9, saying that such an agreement will help to achieve Trump's goal of reducing the trade deficit in the USA.
Taiwan State Oil and Gas Company CPC Corp. She signed a letter in March with the intention to buy six million tons of gas from Alaska LNG, said Brendan Duval, CEO and founder Glenfarne GroupThe main developer of the project.
“You can imagine geopolitical improvements, regardless of whether it is tariff or military reasons – Taiwan is really very focused on registration,” said Duval in an interview with CNBC. Duval said CPC also offered investing directly in Alaska LNG and supply equipment.
March Trade Mission
Governor Duval and Alaska Mike Dunleavy went to South Korea and Japan in March, meeting with high officials in the government and industry. Duval said that Japanese and South Korean companies asked if their development banks could help finance Alaska LNG.
“Recently there were many questions from India, so the fourth horse appeared to the race,” said Duval. He said that Thailand and other Asian countries also showed interest.
The Alaska LNG project has three main elements: pipeline, gas processing plant on a northern slope and a gas to eliminate gas for export in Nikiski in Alaska. Dunleavy said that these facilities cost about $ 12 billion, respectively, $ 10 billion and $ 20 billion, respectively.
Peo said Alaska LNG's permits are already there. Glenfarne expects to make the final investment decision over the next six to 12 months in the first phase of the project, a pipeline from the northern slope to anchor, which will provide gas for national consumption in Alaska, said Duval.
CEO said that the construction of the LNG plant was to start at the end of 2026. He said that the goal is to complete the construction of the entire Alaska LNG project in four and a half years with a full commercial operation from 2031.
Alaska LNG plans to produce 20 million LNG metric tons per year, which is about 23% 87 million tons of LNG that the US exported last yearAccording to kpler data, a goods researcher.
Release of Alaska resources
Alaska plays a central role to increase the production and export of American oil and gas, part of the White House program for “Energy domination”. The president issued an executive order on the first day of office, trying to use Alaska “The extraordinary potential of resources“Prioritizing LNG development in the state.
“For decades we will have it on our walls in Alaska,” said Governor Dunleavy at the Houston conference last month, referring to the executive order.
Once a net importer, the US quickly became the largest LNG exporter in the world, playing an increasingly important role in driving the power plant in Asia and Europe for allies with limited domestic energy resources. For example, Japan and South Korea took about 8% of American LNG exports last year, according to KPler data.
Trump's administration perceives Alaska as a “important strategic project,” said internal secretary Doug Burgum Houston Energy Conference. Dunleavy said at the same conference, LNG exports from Alaska arrived in Japan in about eight days, and he did not have to go through a crowded Panama channel from terminals on the coast of the Persian Gulf.
“They can be able to provide them with the most effective LNG from the Allied partner,” at the same time avoiding chokes, said Duval. “This is the only LNG that the US can provide, which has a direct path, and are very aware of it in today's environment.”
Talks of the North Pacific
Trump told journalists during Joint press conference In February, from the Japanese IShiba Prime Minister, that both countries discuss the pipeline and the possibility of oil and gas consumption in Alaska. Trump said he discussed the “Purchase of the US LNG” in April 8, telephone conversation With the full president of South Korea Han Duck-Soo and the participation of Korea in the “joint undertaking in the pipeline in Alaska.”
Japan wants to maintain a security contract against the growing China and avoid tariffs, officials from Alaska Industrial Development and Export Authority told the financial committee of the Senate Alaska Senate during Lutia presentation. “We are now in a completely” transactional “world of trade,” said the management. They said that Tokyo must invest more in the USA, buy more LNG and enter a joint venture related to oil and gas in Alaska.
The project would probably be the structure of a joint undertaking, and Asian partners sign contracts into large amounts of LNG, said Duval and will not necessarily translate into Japan, Taiwan and South Korea with direct capital rates in Alaska LNG, although Glenfarne is open to such an opportunity, he said.
Duval said that Glenfarne's goal is to be a long -term owner and operator Alaska LNG with partners. Glenfarne is a private developer, owner and operator of energy infrastructure based in New York and Houston. The company adopted 75% of shares in Alaska LNG z Alaska Gasline Development Corporation In March, while maintaining 25%of the AGDC.
Commercial locks and vitality
The Trump administration clearly exerts pressure on Japan, South Korea and Taiwan to invest in Alaska LNG, said Bob McNally, president Rapidan Energy and former energy advisor to President George W. Bush. Although Japan wants to both calm Trump and diversify LNG reserves, Tokyo can still infose in investment in Alaska LNG due to the costs, complexity and risk of the project.
Another blocking of roads is that democrats can return to power in 2028 and try to stop the project from progress, citing environmental effects, said McNally. Finally, President Joe Biden detained permits for new LNG export to countries, including Japan, which do not have free trade contracts with the US, but Trump reversed the suspension of biden as part of the Potok of Execution Orders related to the energy of the first day of office in January.
In addition to political risk, Alaska LNG “has no clear commercial logic,” said Alex Munton, head of global gas tests and LNG in Rapidan. “If it happened, he would have much more support than before, and this project was literally decades in the Planning Council,” said Munton. He said that there are more attractive, existing LNG options for Asian customers on the coast of the Persian Gulf.
Munton said that the project is expensive even because of the LNG industry standards, which builds one of the most expensive infrastructure in the energy sector. Price in the amount of over $ 40 billion must probably be changed up, considering that it is so Two yearsThe analyst said.
“You must assume that the costs will be much higher than the data cited in public,” said Munton. Alaska LNG will probably need a “public policy or public fund liability to revive,” said the analyst.
Duval said Alaska LNG would be competitive without government subsidies. “This is a naturally competitive source of LNG, regardless of geopolitical benefits, regardless of tariff discussions,” he said.
“We have the support of the President of the United States,” said Dunleavy in Houston. “We have Asian allies who need gas. Geopolitical alliances change. Tariff questions are coming. When we really look at it in this context, this is a very profitable project.”