Importing Alaska natural gas: must Japan invest in Donald Trump’s project?

Export energy: an old white house dream

Among the decrees of decrees issued by President Donald Trump since his entry into office in January 2025, one of them has been entitled “Release the extraordinary potential of Alaska in matters of resources”, which proclaims the need to exploit the natural resources of the State, including liquefied natural gas (GNL), in order to curb inflation, create jobs, correct commercial imbalances, strengthen commercial imbalances The influence of the United States internationally and counter the decisions of the foreign powers to transform supplies into energy into a weapon. It is within the framework of this policy that the Trump administration urges Japan, putting pressure, with great reinforcement of harsh tariff negotiations, to invest in Alaska LNG (Alaska Liquefied Natural Gas), a project involving important sums of money. It aims ultimately to transport gas through this state, to liquefy it and to ship it to the countries of East Asia.

Liquefied natural gas enjoys a long history. The first Japanese imports of LNG date back to 1969, and it was LNG from Alaska. But apart from the name, the Alaska LNG project has very little relation to Japanese imports.

The initial project consisted in extracting natural gas from reserves located on the Kenai peninsula, on the southern coast of Alaska, where it was then transformed into LNG and then loaded on boats and then be exported, for a total capacity of only around 1.5 million tonnes per year. From 2015, international LNG prices dropped due to a larger supply and lower demand. It has become increasingly difficult for Alaska to compete with other suppliers. 2017 sounded the death knell for activities in Alaska.

With the new Alaska LNG development project, it is a question of exploiting the gas deposits on the north slope, on the coast of the Arctic Ocean, in northern Alaska. A 1,300 kilometers long, crossing Alaska would transport the gas to the Kenai peninsula, where it would be cooled to produce an annual quantity of LNG which up to 20 million tonnes. Alaska Gasline Development Corp. (AGDC), the independent public company which directs the project (including the construction of a natural gas gas pipeline and a liquefaction factory), aims for LNG shipments by 2030.

Alaska largely depends on the natural gas extracted locally, for its heating needs and its industry. But the gas reserves of the Kenai peninsula, which continue to be dressed, should dry up by the mid -2030s. For Alaska, the development of the northern slope deposits made two strokes of a stone: it provides a new affordable source of energy on the one hand and on the other hand and significant income thanks to export.

Strong LNG demand in East Asia

In February 2025, the Japanese government published its seventh strategic plan for energy, which assesses the prospects for supply and demand in 2040. In addition to its basic energy perspectives, the plan includes an alternative scenario according to which the official adoption objectives of non -fossil fuel (such as renewable energies and hydrogen) were not reached. If on the contrary, the objectives are achieved, the demand in LNG for the 2040 fiscal year should fall compared to the current level (66 million tonnes during the 2022 fiscal year) at a level between 54 and 60 million tonnes. If the country fails to achieve its goals, however, it will then need almost 74 million tonnes of LNG.

To summarize, a certain level of LNG demand should be maintained until 2040. In the meantime, the long -term contracts according to which public services and Japanese companies buy LNG are due. New contracts will have to be signed to ensure a stable long -term energy supply, and Alaska LNG is a potential supplier.

South Korea and Taiwan are in a similar situation. Like Japan, South Korea can only assess the amount of energy that renewable energies can provide over the next 10 or 20 years. Taiwan, which closed its last nuclear power plant in May this year, has adopted an energy strategy that requires the conversion of natural gas coal power plants. It is clear that these three territories will need LNG, therefore representing a commercial opportunity for the Alaska LNG project.

A favorable geographical location

Clearly, Alaska LNG takes advantage of the Nourished support of the Trump administration, but what are the relative profits for Japan and its neighbors?

The biggest advantage is probably geographic proximity. Japan is already importing LNG from the United States, but these expeditions go from the Gulf of Mexico. The shortest route, which goes through the Panama Canal, is almost 17,000 kilometers long. In addition, the engorgement making it difficult to pass by the Lniersiers by the canal, the privileged route is now the one which consists in bypassing the CAP of Bonne-Espérance, long, of 29,000 kilometers. The southern coast of Alaska, on the other hand, is just 6,000 kilometers from Japan. A reduced distance and shipping durations would allow more flexible transportation costs and delivery calendars.

Transport from Alaska is also an attractive point due to navigation safety. LNG from Qatar generally involves the straits of Ormuz and Malacca before taking the northern direction by the sea of southern China. The Strait of Ormuz presents risks for security in the event of an unstable situation in the Middle East and piracy remains a problem in the Strait of Malacca. Beijing increasingly affirming its presence at the Southern China Sea, most of its territorial claims make the conditions of navigation difficult there.

Cost related questions remain

But the Alaska LNG project raises serious questions, including costs and deadlines.

The gas from the north slope is certainly relatively inexpensive, but the construction of a new gas processing plant on the northern slope of a gas pipeline which would cross all Alaska and a liquefaction structure in the Kenai peninsula would cause colossal expenses. A first estimate of the promoter was spending at nearly $ 44 billion, but inflation has grown the construction costs up and the challenges linked to the installation of a gas pipeline in the areas covered by the permafrost could considerably increase the bill. Any final decision will only be done at the end of a detailed and independent analysis, which will most certainly lead to higher costs.

By comparison, let’s take the total investment in the Rio Grande LNG project, currently under construction in Brownsville, Texas, estimated at nearly $ 20 billion.

It is certain that the two projects are very different in terms of the volume of construction work and types of expenditure, but this comparison helps to put into perspective the costs generated by the Alaska LNG project. The important initial investment required increases project financing challenges and could also push the sale of LNG upwards.

Bad timing?

The long delay required in Alaska LNG to launch commercial operations is problematic for several reasons.

First of all, he could harm the ability for Alaska LNG to compete with other LNG projects targeting Asian markets, including American projects, a Canadian project that began to ship LNG from the Pacific Coast in May 2025 and others that provide an extension of their production in Qatar. To summarize, customers of the Asian continent have multiple options available to them to invest and export natural gas. They will only choose Alaska LNG, if it meets their needs in terms of calendar and selling prices. And this is particularly worth for Japan, where most importers are private companies. In South Korea and Taiwan, it is public companies that manage LNG imports, political considerations could therefore play a role in purchasing decisions. But even in this case, it will be up to buyers to decide whether the political advantages are worth additional costs.

Second, according to the current calendar, Alaska LNG will not start to export before the end of Donald Trump’s second term in January 2029. We have seen for ourselves that political reversals can have consequences when a new president of a different party takes control of the White House. The next administration could bring up to date environmental protection policies and climate change from which Donald Trump got rid of, a change of the game that could sow doubt at Alaska Lng. Long -term commercial decisions require, to a certain extent, political visibility upstream. The United States, not knowing what to expect beyond 2029, have become a high-risk country.

The third problem of the extended deadlines for Alaska LNG concerns the year fixed to reach carbon neutrality. Inevitably, LNG demand from importers from Japan and other Southeast Asian countries will decrease as 2050, the year, will come closer. A 20 -year LNG contract concluded in 2030 will run until 2049. If long -term contracts are necessary to ensure funding for the future, it is then quite logical to start exports as soon as possible. And Alaska LNG has no time to waste.

A narrow opportunity window

Projects to exploit natural resources on the northern slope have existed for decades, but they have found themselves at the point of port repeatedly, colliding with obstacles of a pecuniary or political order. The decree of President Donald Trump “released the extraordinary potential of Alaska in terms of resources” offers an unprecedented opportunity for the Alaska LNG project. But the end of Donald Trump’s mandate and the objective of carbon neutrality gradually approaching, the window of opportunity is narrow.

In the end, it is the speed and the costs that will determine whether or not Alaska LNG will be able to make a place on the East Asian market.

In terms of speed, the project needs to make concrete progress, that is to say that a final decision concerning investments and the start of construction work must be taken, as long as the winds of the political sphere are still favorable. Otherwise, the project will lose its momentum and Alaska LNG will be dameled the pawn by other projects.

And of course, let’s not forget financial considerations. It will not be well advised to overestimate the value of the Alaska LNG project on a single geographical basis. That said, if Alaska LNG is able to offer prices comparable to those of its competitors, its geographic location then becomes a weight argument, considerably increasing its chances of counting on the East Asian market.

(Read also: LNG supplier countries in Japan: Donald Trump wants to increase exports to the archipelago)

(Title photo: Arrival of a Lightner at the Futsu power plant, in the prefecture of Chiba, in February 2023. © Kyôdô)