Alaskan state representatives will visit Japan this month to court investors for a natural gas project President Donald Trump says could pump trillions of dollars into the U.S., but Japanese energy firms remain sceptical of the project’s feasibility.
Officials from the state-run Alaska Gasline Development Corporation (AGDC) and development partner Glenfarne Group will visit “allied Asian nations in late March to update industry leaders on Alaska LNG’s economic and strategic competitive advantages, and discuss opportunities for participation”, said AGDC spokesperson Tim Fitzpatrick.
They want to transport natural gas south from Alaska’s remote north via a $44 billion 1,300-km (800-mile) pipeline, to be shipped as liquefied natural gas (LNG) to Japan, South Korea and Taiwan. Alaska Governor Mike Dunleavy said last week that exports could begin by 2030 from a project that could deliver about 3.5 billion cubic feet of gas per day.
Trump is pushing energy sales to Asian allies while threatening trade tariffs, reviving Alaska’s stalled LNG ambitions. On February 7, he asked Japanese Prime Minister Shigeru Ishiba for support and on March 4 South Korea agreed to discuss the project. The same day Trump told Congress that Japan and South Korea wanted to partner on Alaskan LNG.
Trump’s support will be “helpful to the accelerated advancement of the project”, Glenfarne said in an email.
South Korea’s industry ministry said AGDC had asked for a meeting, but that nothing has been decided.
RESERVATIONS
Despite Trump’s claim that Japan wants in, Japanese energy firms have yet to commit.
“Companies are interested in it, but still have a lot of reservations. Higher cost has been a focal point” for Alaska for years” said Hiroshi Hashimoto, a senior analyst at the government-affiliated Institute of Energy Economics.
Potential investors include Japan’s biggest oil and gas explorer Inpex Corp, trading firms Mitsubishi Corp and Mitsui & Co, top LNG buyer JERA, and the government’s Japan Organization for Metals and Energy Security (JOGMEC) and the Japan Bank of International Cooperation, which finance overseas energy projects, two sources familiar with AGDC’s outreach said on condition of anonymity.
“The question is whether it can be economically sustainable,” Inpex CEO Takayuki Ueda said at a briefing last month. Alaska’s extreme cold and the pipeline’s scale had hindered progress, he added.
The government, Inpex’s largest shareholder, has not given any guidance on Alaska, a company spokesperson said.
The companies, including Inpex, and the banks declined to say whether they will meet the Alaskan representatives in Tokyo.
Meanwhile, diplomatic pressure on Ishiba to ease trade frictions with U.S. gas imports looks set to intensify.
“Japan has committed to reduce the trade deficit with us and its reliance on Russia by purchasing U.S. liquefied natural gas. I will hold them to that promise,” George Glass, Trump’s pick for Japan ambassador, said at his Senate confirmation hearing on Thursday.
(Reporting by Katya Golubkova, Yuka Obayashi, Tim Kelly and John Geddie, additional reporting by Joyce Lee in Seoul; Editing by Himani Sarkar)