Latest news with #AlaskaGaslineDevelopmentCorp
04-08-2025
- Business
Energy from the North? Japan Eyes the Promise and Perils of Alaskan Gas Investment
Among the barrage of executive orders that US President Donald Trump issued upon taking office in January 2025 is one titled Unleashing Alaska's Extraordinary Resource Potential, which proclaims the need to tap the state's natural resources, including liquefied natural gas, to rein in inflation, create jobs, correct trade imbalances, boost America's global clout, and counter moves by foreign powers to weaponize energy supplies. In conjunction with this policy, the Trump administration is urging Japan—under pressure from tough tariff negotiations—to invest in the Alaska LNG project, a costly plan to pipe gas across the state, liquefy it, and ship it to East Asian countries. Liquefied natural gas has a long history in Alaska. Japan's very first imports of LNG, back in 1969, were shipped from the state. But apart from the name, the Alaska LNG project being pushed by the White House has very little in common with its predecessor. Under the earlier plan, natural gas was extracted from reserves on the Kenai Peninsula on the south coast of Alaska, where it was processed into LNG and loaded onto ships for export. Total capacity was only about 1.5 million tons a year. Beginning in 2015, global LNG prices dropped as supplies increased and demand weakened, and it became increasingly difficult for Alaska to compete with other suppliers. In 2017, Alaska LNG's operations were shut down. The new Alaska LNG development project proposes to tap the North Slope gas fields on the Arctic Ocean coast in northern Alaska. A 1,300-kilometer trans-Alaska pipeline would transport the gas all the way down to the Kenai Peninsula, where chilling facilities would produce up to 20 million tons of LNG annually. Alaska Gasline Development Corp. (AGDC), the independent public corporation heading up the project (including construction of a natural-gas pipeline and liquefaction plant) hopes to begin shipping LNG around 2030. Alaska depends heavily on locally extracted natural gas for its own heating and industrial purposes, and the Kenai Peninsula's gas reserves have been dwindling, with supplies expected to run out sometime in the mid-2030s. For the state, therefore, development of the North Slope fields promises a new source of affordable energy for Alaskans, as well as significant revenue from exports. LNG Demand in East Asia In February 2025, the Japanese government released its Seventh Strategic Energy Plan, which calculates the outlook for energy supply and demand in 2040. Alongside its basic energy outlook, the plan incorporates an alternative scenario in which the official targets for adoption of nonfossil fuels (such as renewable energy and hydrogen) are not met. If the goals are achieved, demand for LNG in fiscal 2040 is expected to drop from the current level of 66 million tons (fiscal 2022) to somewhere between 54 million and 60 million tons. If the country falls short of the targets, though, it will need an estimated 74 million tons of LNG. In short, a certain level of demand for LNG is expected to persist through 2040. In the interim, the long-term contracts under which Japanese utilities and trading companies purchase LNG are coming up for renewal. New contracts will have to be signed to ensure a stable energy supply farther down the road, and Alaska LNG is one potential supplier. South Korea and Taiwan are in a similar position. Much like Japan, South Korea can only guess at the amount of energy renewables will be able to supply over the next 10 or 20 years. Taiwan, which shut down its last operating nuclear power plant in May this year, has adopted an energy strategy that calls for converting coal-fired plants to natural gas. All three countries have a clear need for LNG going forward, presenting a business opportunity for Alaska LNG. Geographical Merits Clearly, Alaska LNG enjoys the Trump administration's enthusiastic backing, but what are the relative benefits for Japan and its neighbors? The biggest advantage is probably geographical proximity. Japan already imports LNG from the United States, but those shipments originate in the Gulf of Mexico. The shortest route, through the Panama Canal, is about 17,000 kilometers. Moreover, because congestion has made it difficult for LNG tankers to transit the canal, the preferred route nowadays is around the Cape of Good Hope, a 29,000-kilometer trip. The southern coast of Alaska, by contrast, is only about 6,000 kilometers from Japan. The shorter distance and shipping time would mean lower transportation costs and more flexible delivery schedules. Shipping from Alaska is also attractive from the standpoint of safety of navigation. LNG from Qatar typically passes through the Strait of Hormuz and the Strait of Malacca before traveling north through the South China Sea. The Strait of Hormuz poses safety risks whenever the situation in the Middle East is unstable, and piracy continues to be an issue in the Strait of Malacca. China's increasingly assertive activity in the South China Sea, most of which it claims as its own territory, makes navigation problematic there. Shipping LNG from Alaska is a way of avoiding these safety risks. Cost Questions Remain But the Alaska LNG plan raises some serious questions centered on costs and lead time. Gas from the North Slope is inexpensive in and of itself, but the construction of a new gas treatment plant on the North Slope, a trans-Alaska pipeline, and a liquefaction plant on the Kenai Peninsula would incur enormous costs. An early estimate by the developer put the total expense at about $44 billion, but inflation has pushed up construction costs since then, and the challenges of laying pipeline through permafrost areas could add significantly to the expense. Any final decision must await a detailed, independent analysis, which will doubtless yield a higher price tag. For purposes of comparison, one might note that total investment in the Rio Grande LNG project, now under construction in Brownsville, Texas, is estimated at roughly $20 billion. To be sure, the two projects differ significantly in terms of the scale of construction and the kinds of expenses involved, but the comparison helps put the cost of the Alaska LNG project in perspective. The high initial investment required augments the challenges of financing the project and could also push up the selling price of the LNG thus produced. Bad Timing? The long lead time required for Alaska LNG to launch commercial operations is problematic on several counts. First, it could affect Alaska LNG's ability to compete with other LNG projects targeting Asian markets, including various US ventures, a Canadian project that began shipping LNG from the Pacific Coast in May 2025, and plans to expand production in Qatar. In short, Asian customers have multiple options for investing in and importing natural gas, and they will only choose Alaska LNG if it suits their needs with respect to timing and terms of sale. This is especially true in Japan, where most of the importers are private companies. In South Korea and Taiwan, where public corporations handle the importation of LNG, political considerations may play some role in purchasing decisions, but even so, buyers will have to decide whether the political benefits are worth the additional costs. Second, under the current timeline, Alaska LNG will not begin exporting until after the end of Trump's second term of office in January 2029. We have witnessed firsthand the policy U-turns that can result when a new president from a different party takes control in Washington. The next administration might well resurrect the environmental protections and climate-change policies that Trump has discarded, a shift that could spell trouble for Alaska LNG. Long-term business decisions require a measure of policy predictability, and in this key respect, the United States has become a high-risk country. The third issue with Alaska LNG's long lead time pertains to the target year for achieving net zero carbon emissions. Demand for LNG from Japanese and other East Asian importers is bound to decline sharply as the 2050 target year approaches. A 20-year LNG contract concluded in 2030 will last through 2049. If long-term contracts are needed to secure funding for the future, then it makes sense to begin export operations as soon as possible. Alaska LNG has very little time to spare. A Narrow Window of Opportunity Plans for tapping the North Slope's natural gas resources have been around for decades, but they have stalled repeatedly in the face of financial and political obstacles. Trump's executive order Unleashing Alaska's Extraordinary Resource Potential presents an unprecedented opportunity for the Alaska LNG project. But given Trump's term of office and the looming net-zero deadline, the window of opportunity is narrow. Ultimately, speed and cost will determine whether Alaska LNG can tap into the East Asian market. In terms of speed, the project needs to make concrete progress—meaning a final investment decision and initial construction—soon, while the political winds are still favorable. Otherwise, the project will lose momentum, and the market will be snapped up by competing LNG projects. The importance of cost considerations goes without saying. It would be foolish to overrate the value of Alaska LNG solely on the basis of geography. That said, if Alaska LNG can offer its product at a price comparable to that of competitors, then its geographical location becomes a powerful inducement, vastly increasing its chances of claiming a share of the East Asian market. (Originally published in Japanese on July 25, 2025. Banner photo: A liquefied natural gas tanker arrives at Futtsu Power Station in Futtsu, Chiba Prefecture, in February 2023. © Kyodo.)
CNA
22-07-2025
- Business
- CNA
Taiwan's CPC denies 'specific' US shale gas acquisition talks
TAIPEI :Taiwan's state-owned energy company CPC Corp said it is not in talks for "specific" shale gas fields in the United States, but it does not rule out any prospective partners and will make the most favourable decision based on its own evaluations. CPC is in early stage discussions to buy shale-gas producing assets in the United States, three sources familiar with the matter told Reuters earlier this month, in a bid to secure natural gas supplies to fuel Taiwan's economy. In a statement late on Monday, CPC said U.S. shale gas has long been an important target area for the company because of its high quality, mature extraction technology and favourable investment environment. "CPC will not rule out any prospective partners and will make the most favourable decision based on the evaluation results," it said. "As for reports that CPC is in the process of discussing the acquisition of specific shale gas fields in the United States, that is not true," the company added, without elaboration. Taiwan has pledged to increase its purchase of energy from the United States as a way of reducing its yawning trade surplus and head off tariffs. In March, CPC signed an agreement with Alaska Gasline Development Corp to buy LNG and invest in the Alaska LNG project which will transport gas south from Alaska's remote north via pipeline, to be shipped as LNG to Taiwan, Japan and South Korea.
Reuters
22-07-2025
- Business
- Reuters
Taiwan's CPC denies 'specific' US shale gas acquisition talks
TAIPEI, July 22 (Reuters) - Taiwan's state-owned energy company CPC Corp said it is not in talks for "specific" shale gas fields in the United States, but it does not rule out any prospective partners and will make the most favourable decision based on its own evaluations. CPC ( is in early stage discussions to buy shale-gas producing assets in the United States, three sources familiar with the matter told Reuters earlier this month, in a bid to secure natural gas supplies to fuel Taiwan's economy. In a statement late on Monday, CPC said U.S. shale gas has long been an important target area for the company because of its high quality, mature extraction technology and favourable investment environment. "CPC will not rule out any prospective partners and will make the most favourable decision based on the evaluation results," it said. "As for reports that CPC is in the process of discussing the acquisition of specific shale gas fields in the United States, that is not true," the company added, without elaboration. Taiwan has pledged to increase its purchase of energy from the United States as a way of reducing its yawning trade surplus and head off tariffs. In March, CPC signed an agreement with Alaska Gasline Development Corp to buy LNG and invest in the Alaska LNG project which will transport gas south from Alaska's remote north via pipeline, to be shipped as LNG to Taiwan, Japan and South Korea.
Yahoo
20-06-2025
- Business
- Yahoo
LNG exports to primarily drive North America's gas processing capacity additions by 2030
Natural gas processing in North America is experiencing a significant surge, driven by a confluence of factors including growing LNG (liquefied natural gas) exports, increased domestic demand and a strategic pivot towards cleaner energy sources. As the region capitalises on its abundant natural gas reserves to meet growing LNG demand, a significant increase in LNG liquefaction capacity is anticipated, particularly from the US and Canada, which will require corresponding increases in liquefaction and processing facilities. To meet the projected demand, new liquefaction plants and associated infrastructure are being developed in North America, leading to increased gas processing capacity. The US is a major player in this expansion, with plans to significantly increase its LNG export capacity. Growth will necessitate more gas processing infrastructure to handle the increased volume of natural gas being liquefied for export. Prudhoe Bay II is a major upcoming gas processing plant, with substantial capacity additions of 3.9 billion cubic feet per day (bcfd) during the outlook period. Alaska Gasline Development Corp is the operator as well as equity owner of this planned sweetening-type plant, which is set to become operational in 2030. Canada stands second, accounting for 1.3 bcfd of capacity additions by 2030. Arcres Attachie 05-20-084-24 002, Kobes Phase 1 and Kobes Phase 2 are some of the major gas processing plants with significant capacity additions by 2030. Mexico accounts for the remaining gas processing capacity additions in the region, with Papan Expansion accounting for all of the 150 mmcfd capacity addition by 2030. Coastoil Dynamic SA de CV is the operator of the planned fractionation plant, while Coastal Contracts Bhd and Nuvoil SA de CV hold 50% equity each in the plant, which will commence operations in 2025. Further details of global gas processing capacity and capital expenditure analysis can be found in GlobalData's new report, 'Gas Processing Industry Outlook by Capacity and Capital Expenditure with Details of All Operating and Planned Processing Plants to 2030.' "LNG exports to primarily drive North America's gas processing capacity additions by 2030" was originally created and published by Offshore Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio
Asahi Shimbun
23-05-2025
- Business
- Asahi Shimbun
Benefits for Japan uncertain in Trump-backed LNG project
A tanker carrying LNG berths at a port in Ishikari, Hokkaido, in 2021. (The Asahi Shimbun) As trade negotiations between Japan and the United States intensify, the possibility of increasing Japanese imports of liquefied natural gas (LNG) from Alaska has become a major talking point. While the Alaskan LNG project holds logistical and geopolitical advantages for Japan, serious questions remain about its economic feasibility. Washington has been eager to promote the project, which involves transporting natural gas from fields in Alaska's North Slope to a liquefaction terminal on the southern coast, with plans to export 20 million tons annually to Asia starting in the 2030s. Following a summit with Prime Minister Shigeru Ishiba in February, President Donald Trump said the two countries were discussing a joint gas development project in Alaska. The initiative aligns with U.S. ambitions to reduce its trade deficit through greater energy exports. Just days after announcing a sweeping tariff policy in April, Treasury Secretary Scott Bessent told U.S. media that Japan, South Korea and Taiwan were expected to become key buyers of and investors in Alaskan LNG, possibly offsetting the need for tariffs. Seeking to ease tariff pressures from Trump, Japan has used LNG imports as a bargaining chip in ongoing bilateral negotiations. A senior official from the Japanese delegation said, 'If the project makes economic sense, we are open to importing it.' Taiwan signed a preliminary agreement with the Alaska Gasline Development Corp. in March, and South Korea has also shown interest. MASSIVE PIPELINE COSTS However, doubts about the project persist among Japanese businesses. The project's massive scale is a sticking point. A 1,300-kilometer pipeline is required to connect northern gas fields to the southern coast, with total costs estimated at $44 billion (6 trillion yen). Takashi Uchida, chairman of the Japan Gas Association and chairman of Tokyo Gas Co., noted that the typical cost of LNG development is less than half that amount. The project dates back decades but has repeatedly stalled due to its enormous cost. Daisuke Yamada, executive vice president of Tokyo-based oil and gas development company Inpex Corp., remarked, 'It would be extremely difficult for private companies to make this commercially viable.' Alaska holds historical significance for Japan's energy sector; it was the source of the country's first LNG imports in 1969. Tokyo Gas announced in 2017 that it was considering purchases from the Alaskan gas project, but progress has since slowed. At a news conference earlier this year, Taku Minami, the company's managing executive officer, said no more than, 'We are keeping an eye on it as a potential supply source.' Mitsubishi Corp., which facilitated Japan's first LNG imports from Alaska, is also prioritizing other ventures. Mitsubishi President Katsuya Nakanishi said the company is focusing on completing its LNG Canada project before committing to new ones. LOGISTIC, GEOPOLITICAL APPEAL Despite the financial concerns, Alaska still offers strategic advantages. LNG can be shipped from the U.S. state to Japan in just a week—faster than from the Middle East or the Gulf of Mexico—lowering transportation costs. Diversifying Japan's supply sources also reduces geopolitical risk. Currently, Australia supplies 38 percent of Japan's LNG imports, followed by Malaysia at 15 percent and the United States at 10 percent. Boosting U.S. imports could enhance energy security. Many other LNG projects across the United States, particularly those along the Gulf of Mexico, are nearing final investment decisions, according to the state-backed Japan Organization for Metals and Energy Security. Masataka Yarita, an LNG and methane specialist at the organization, said Alaska's success depends on its ability to offer competitive pricing compared to these alternatives. (This article was written by Satoshi Shinden, Tomoki Morishita and Shiki Iwasawa.)
