Japan is considering a US$44 billion investment in an ambitious Alaskan gas pipeline project, aiming to strengthen ties with US President Donald Trump and mitigate trade tensions.

The proposed 1,200-kilometre pipeline would transport natural gas from Alaska’s North Slope to a liquefaction facility in Nikiski, enabling exports to Asian markets.

This initiative has been a focal point in recent discussions between Japanese Prime Minister Shigeru Ishiba and President Trump during Ishiba’s first official visit to Washington.

President Trump, a vocal supporter of the Alaska LNG project, announced the potential partnership as a “joint venture” between the US and Japan, emphasising its benefits for energy security and economic ties.

Trump highlighted that Japan would soon begin importing “historic new shipments” of American liquefied natural gas (LNG) in record volumes, underscoring the project’s strategic importance for both nations.

The pipeline would provide Japan with a reliable and geographically advantageous energy source, reducing dependence on less stable suppliers like Russia and the Middle East.

Despite its potential, Japan has expressed concerns about the project’s economic feasibility due to its high costs compared to alternative LNG sources.

Japanese officials remain cautious, noting that detailed assessments of costs and competitiveness are required before committing fully.

However, Japan has shown a willingness to explore the deal, particularly as part of broader efforts to reduce its $56 billion trade deficit with the US.

This could include increased LNG purchases and higher defence spending.

The Alaska LNG project has faced significant hurdles since its inception, including environmental opposition and funding challenges.

Authorised by the Federal Energy Regulatory Commission in 2020 and receiving final legal approval in 2022, the project is now being advanced by the Alaska Gasline Development Corporation in partnership with US-based developer Glenfarne.

The estimated US$10 billion pipeline cost is part of a larger US$44 billion development plan, which includes gas treatment facilities and a liquefaction plant.

Japanese state banks like the Japan Bank for International Cooperation (JBIC) and trading giants such as Mitsubishi and Mitsui are potential financiers of the project.

Mitsui’s Chief Financial Officer Tetsuya Shigeta acknowledged the opportunity but stated that no decisions have been made yet.

Prime Minister Ishiba has emphasised Japan’s need to reduce reliance on fossil fuels but refrained from detailing specific commitments regarding the Alaska project.

Meanwhile, Japanese energy companies like JERA have expressed interest in diversifying their LNG portfolios to include more US-sourced gas.

The pipeline’s proponents argue that its proximity to Asia makes it a competitive option for LNG exports, with an eight-day shipping route compared to longer voyages from Gulf Coast facilities.

However, even under optimal conditions, first exports from the project are unlikely before 2031.

As discussions continue, this initiative represents a significant step in US-Japan energy cooperation while addressing broader geopolitical and trade concerns.

Both nations view the project as a means to enhance economic ties and secure stable energy supplies for years to come.