Alaska’s ambitious liquefied natural gas (LNG) export plans are gaining momentum, with the Alaska Gasline Development Corporation (AGDC) finalising agreements with Glenfarne to develop the US$44 billion Alaska LNG project.
The venture aims to tap into Alaska’s vast hydrocarbon reserves, constructing a 1,300-kilometre pipeline to a liquefaction plant on the Kenai Peninsula, south of Anchorage.
Alaskan Governor Mike Dunleavy announced on March 14 that exports could begin by 2030, with approximately 3.5 billion cubic feet of LNG per day destined for Asian markets.
The project has garnered support from unexpected corners, including former US President Donald Trump, who highlighted Alaska LNG in his address to Congress during his first term.
He envisioned partnerships with Japan, South Korea, and other nations, attracting trillions of dollars in investment.
Japan has already signalled interest, and discussions are underway with Taiwan, South Korea, and Thailand, despite the absence of free trade agreements with the US.
AGDC and Glenfarne emphasise the project’s competitive advantages, citing Alaska’s “stranded asset” of North Slope natural gas, which avoids the price volatility associated with index pricing.
However, establishing successful trade relations faces headwinds from President Trump’s escalating tariffs, which have destabilised Asian economies and supply chains.
The project received federal authorisation in 2020 and final legal approval in 2022 during Trump’s first term.
While the Biden administration conducted an environmental assessment in 2023, Trump has since reaffirmed his commitment, issuing an executive order on January 20 citing the project’s “economic and national security benefits.”
Alaska holds approximately 100 trillion cubic feet of natural gas reserves, according to the US Energy Information Administration (EIA).
Redirecting LNG to international markets would strengthen the US’s market position and address local gas demand, particularly in south-central Alaska, which faces a potential supply shortfall by 2027.
However, Trump’s protectionist trade policies complicate matters. Taiwan and Thailand, key potential investors in Alaska LNG, are particularly vulnerable to increased tariffs due to their high export-to-GDP ratios with the US.
South Korea and Thailand also face vulnerability due to their ties to North American supply chains, while Taiwan is heavily impacted by US-China trade tensions.
Japan is a primary target for Alaska LNG, seeking to reduce its reliance on Russian gas.
LNG accounted for 29 per cent of Japan’s energy production in 2023.
Hiroshi Hashimoto from the Institute of Energy Economics Japan notes that Alaska LNG is considered a future supply source, with its location being attractive to Asian consumers.
However, he also cautions about the challenges of the long-distance pipeline and associated infrastructure costs.
Potential investors in Alaska LNG include the Japan Bank for International Cooperation and trading companies like Mitsubishi and Mitsui.
Securing diversified gas supplies could outweigh concerns about Trump’s trade disputes and Alaska LNG’s financial costs, especially given the recent energy crisis in Europe following the end of the Ukraine-Russia gas transit deal.
AGDC and Glenfarne aim for a final investment decision by mid-2025, with plans to visit Asian nations in late March to attract investors.
Overall US LNG export capacity is projected to surge from 87 million tonnes per annum (mtpa) in 2024 to 565mtpa by 2030, solidifying its position as the world’s largest LNG exporter.
Alaska LNG is central to this growth, navigating a complex web of energy interests, domestic gas concerns, and Asian diversification efforts.
The project’s success hinges on a stable geopolitical and investment landscape, which remains uncertain under Trump’s second term.
