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By Reuters – President Donald Trump could unveil plans as soon as Wednesday to tap South Korea’s pledged strategic investment package for about $54 billion to build a liquefied natural gas project in Alaska, as he rolls out a series of economic initiatives ahead of November’s midterm elections.
WHAT IS THE ALASKA LNG PROJECT?
The Alaska LNG project is a proposed $44.5 billion to $54.5 billion development to transport natural gas from Alaska’s North Slope in the state’s far north through a pipeline to domestic consumers and, ultimately, an export terminal for overseas buyers. The project is 75%-owned by Glenfarne Group, with the state of Alaska holding the remaining 25% stake.
The project involves constructing a pipeline stretching over 800 miles, or nearly 1,300 km, from the North Slope to an LNG liquefaction facility in Alaska’s southern port of Nikiski.
The project aims to take a final investment decision on the pipeline in 2026, followed by the export facility in 2027, with first LNG exports targeted for 2031. That marks a delay from its previous goal of reaching a pipeline FID by late 2025, as Glenfarne fell short of its target for signing LNG agreements, though schedule slippages are common for large-scale LNG developments.
WHO IS THE PROJECT TARGETING?
The project aims to sell LNG to east Asian buyers as the export terminal’s location in southern Alaska would mean much shorter voyages than from LNG terminals on the Gulf coast.
So far it has lined up agreements covering 13 million metric tons a year from buyers in Japan, South Korea, Taiwan, Thailand and French major TotalEnergies. It needs agreements for another 3 million tons and must turn them into binding deals in order to line up financing for the project.
LNG buyers have been seeking more diverse supply sourcing ever since the US-Israeli war against Iran cut off Gulf shipments, but interest in Alaska LNG remains cautious.
WHY IS THE PROJECT IN FOCUS NOW?
Alaska LNG has been discussed for decades, but has received renewed backing under Trump, who has championed the project as a way to boost national security and trade with partners.
Last year, Trump, along with the heads of state-run Alaska Gasline Development Corporation and Glenfarne Group visited potential Asian markets, including Taiwan, Japan, South Korea and Thailand, to court investors for the project.
Ahead of the US midterm elections in November, the Trump administration is pushing to expand US energy exports and attract investment from allied nations.
WHY IS THERE SCEPTICISM?
Many in the LNG industry remain sceptical about Alaska LNG’s commercial viability.
As a 20-million-ton-per-year greenfield project requiring a lengthy pipeline, Alaska LNG is seen as a high-risk development for its relatively inexperienced developer. Capital requirements are also substantial, with the pipeline alone estimated at between $13.2 billion and $16.9 billion, with cost overruns a significant risk.
Higher project costs could result in higher LNG prices for buyers. Alaska LNG must also compete with lower-cost US Gulf Coast exports as well as Canadian projects targeting Asian markets. While Canada’s LNG industry is relatively new, many buyers view it as an attractive alternative due to its political stability.
Questions also remain over commercial support for Alaska LNG. The supply agreements secured so far are mostly non-binding, leading some industry participants to suggest this may reflect support for the Trump administration’s efforts to advance Alaska LNG rather than firm commitments to purchase the project’s LNG.
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