War in the Middle East is spurring interest in Asia for gas from the $44 billion Alaska LNG project, top executives of lead developer Glenfarne said, who aim to make final investment decisions this year and next, and start shipping LNG in 2031.
Final go-aheads for the project’s pipeline and export terminal have been delayed as Glenfarne has yet to reach its target of signing binding offtake deals for 80% of the planned export capacity of 20 million metric tons a year of liquefied natural gas.
So far it has lined up commitments for 13 million tons a year. It needs agreements for another 3 million tons and then has to turn them into binding deals in order to line up financing for the project.
“There’s a real interest, particularly with everything happening in the Middle East right now. Everyone would like to get those (preliminary deals) turned into long-term agreements,” Adam Prestidge, president of Glenfarne Alaska LNG, told Reuters on the sidelines of a conference in Tokyo.
He said the tasks of converting commitments into binding legal documents and putting in place financing “are all well underway”.
Glenfarne, which owns 75% of the project, aims to give a final go-ahead for the project’s pipeline this year – delayed from an earlier target of late 2025 – and hopes to make a final investment decision for the export terminal in early 2027, he said.
The developer is in talks with two potential offtakers for 3 million tons of LNG supply, Glenfarne CEO Brendan Duval told the conference, expecting agreements to “move very quickly”.
The war in the Gulf has forced Qatar, one of Asia’s major LNG suppliers, to stop all shipments, as its export route through the Strait of Hormuz has been blocked.
“This is a reminder that Alaska LNG has the only LNG cargoes that can get to North Asia from anywhere in the world that doesn’t have to go through a choke point,” Duval said.
“That’s the reason Taiwan signed up, Thailand signed up, Japan and Korea have all signed up for volumes,” he said.
Japan’s two biggest LNG importers, JERA and Tokyo Gas, have reached preliminary deals to buy a combined 2 million tons a year from Alaska LNG.
Duval said Greek firm Danaos would aim to deliver LNG carriers around the time the project comes online, with Glenfarne aiming to start shipping LNG in 2031.
“We don’t need any special carriers at all. The ice floes there allow us to have regular LNG carriers. Any LNG carrier globally can come and go,” he said.
(Reporting by Katya Golubkova and Yuka Obayashi; Additional reporting by Tim Kelly; Editing by Sonali Paul)