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The Star
09-05-2025
- Business
- The Star
Thailand bids to join Alaska gas project before tariff talks
BANGKOK: Thailand said it's interested in co-developing a massive gas pipeline project in Alaska backed by President Donald Trump, as the South-East Asian nation explores ways to cut its US$46 billion trade surplus with the US before tariff talks. Thai officials discussed Bangkok's potential involvement in the $44 billion Alaska venture - a long-delayed pipeline that will stretch across the state - through investments in gas exploration and production and related infrastructure with project officials, the Ministry of Energy said in a statement on Thursday (May 8). Thailand is also open to signing a long-term contract to import about 3 to 5 million tonnes of liquefied natural gas from Alaska annually, the ministry added. Trump's backing for the project has seen Asian LNG buyers like Japan, South Korea and Taiwan express interest in joining forces with the US developers. The Thai interest in the Alaska venture is seen as part of efforts to ramp up investments in the US to ward off the Trump administration's plan to impose a steep 36% tariff on the country's exports. Bangkok, which is preparing to start negotiations with Washington, has identified natural gas, petrochemical feedstock and farm commodities as US products that it will import more in order to help cut the trade gap. A stake in the Alaska project will also help net energy importer Thailand to lock in guaranteed supplies amid depleting gas reserves in the Gulf of Thailand. The decline in local output has pushed the country to increase LNG imports in recent years. Last year, natural gas accounted for 58% of Thailand's power generation mix. Domestic output only made up about 60% of the 4,500 million standard cubic feet per day that Thailand needed, with the rest being sourced through LNG imports and supplies from gas fields in Myanmar. With electric vehicles taking off and investments in artificial intelligence and power-hungry data centers likely to boost electricity demand, the Alaska project may be a "viable future option' for affordable electricity, said Prasert Sinsukprasert, permanent-secretary at the Energy Ministry, who led a delegation to Alaska earlier this week. The delegation discussed LNG trade and investment opportunities with Alaska Governor Mike Dunleavy and executives from state-run Alaska Gasline Development Corp. and Glenfarne Group, which back the project. The Thai team also included executives of state-controlled energy firm PTT Pcl, the Electricity Generating Authority of Thailand and Electricity Generating Pcl - all licensed LNG shippers in Thailand. The companies have been instructed to further discuss with their US counterparts on potential import deals, the ministry said. Still, the Alaskan project faces massive hurdles, and hasn't yet secured any binding investments or purchase agreements despite some interest from governments in Asia that are looking for ways to head off Trump's threatened tariffs. The project has been proposed in various forms for decades. Unlike similar facilities on the US Gulf Coast, it would be massive in scale, requiring the construction of a pipeline stretching 1,287km. Governor Dunleavy has said that Trump's support for the project will ensure it gets completed. - Bloomberg
Yahoo
24-04-2025
- Business
- Yahoo
Alaska, rich in petroleum, faces an energy shortage
In the state with the fourth-largest proven reserves of oil and gas in the U.S., there is a looming energy shortage. Above the Arctic Circle, oil producers on Alaska's North Slope send an average of 465,000 barrels of crude oil south each day for shipping to refineries and users around the country and the world. But in south-central Alaska – Anchorage and the surrounding region, home to 63% of the state's population – utility companies are warning they may not have enough natural gas from current sources to keep the power and heat on without interruption. As a professor at the University of Alaska Anchorage who studies the economics of natural resources, I can see this apparent contradiction has a straightforward cause but no simple solution. The North Slope region once produced nearly 2 million barrels of oil per day at its peak in the 1980s. Every barrel is transported via the 800-mile Trans-Alaska Pipeline System to the port of Valdez, where it is loaded onto tanker ships. The state government collects significant taxes and royalties on oil production. For decades, oil revenue allowed the state to fund all government spending without imposing broad-based income, sales or property taxes. At the height of the oil boom, there was so much money that Alaska established a wealth fund, now valued at over US$80 billion, and began distributing dividends to every resident. But the Trans-Alaska Pipeline is designed to carry oil, not natural gas. A state law prevents producers from burning off excess gas, or flaring, as happens in many fields. With nowhere to send it, gas extracted from Alaska's oil fields is reinjected into the ground to boost well pressure and push more oil out. Alaska's gas reserves are significant. State estimates suggest the North Slope has about 35 trillion cubic feet of proven reserves. That's almost as much natural gas as the U.S. as a whole produced in 2023. But that is just the beginning: The North Slope also has the potential for another 200 trillion cubic feet that remains undiscovered. And improving technologies and techniques may be able to extract another 590 trillion cubic feet, according to the Alaska Gasline Development Corp., a company owned by the state of Alaska that is trying develop a project to extract and sell the state's natural gas. As oil production declines and prices remain uncertain, selling gas could provide a different stream of revenue for the state, potentially providing billions of dollars. For decades, there have been numerous proposals to develop Alaska's gas. State agencies and the petroleum industry have collectively spent hundreds of millions of dollars on this effort. The concept that's closest to reality is Alaska Gasline Development Corp.'s proposal to build a plant on the North Slope to remove gas impurities, a liquefaction plant near Anchorage that could export 20 million tons of liquefied gas each year – around a trillion cubic feet – and an 807-mile pipeline to connect the two. The cost is expected to be significant: The corporation's own estimate is that it would cost $44 billion. But that number was developed before the construction sector saw significant inflation in 2022. An engineering study due for release in late 2025 will provide a more updated figure. Alaskans remember that the Trans-Alaska Pipeline ended up costing 25% more than projected. Since his first day in office, President Donald Trump has touted this pipeline as part of efforts to expand the nation's production of fossil fuels. He told a joint session of Congress it was a near-ready project, with Japan and South Korea ready to invest 'trillions of dollars each.' In February 2025, he stood alongside Japanese Prime Minister Shigeru Ishiba to announce a 'joint venture' to develop the pipeline project, but no specific details have been announced. There is a growing need to address Alaska's domestic energy shortfall. South-central Alaska relies on natural gas for more than 70% of its electric and heating needs. But the gas reserves closest to Anchorage, in the Cook Inlet, which have provided energy to the area since the 1960s, are dwindling, and prices are rising. In 2005, wholesale gas prices were $3.75 per 1,000 cubic feet of natural gas. By 2024, the price had more than doubled, to $8.75. By contrast, the rest of the U.S. has seen natural gas prices cut in half over that period, thanks in part to horizontal drilling and hydraulic fracturing, also known as fracking. In 2022, Hilcorp, the company responsible for roughly 85% of the Cook Inlet gas production, reported that by 2027 it might not be able to supply enough gas for utilities that serve the region. Solutions other than the pipeline are also slow and expensive. Local utilities estimate that improving energy efficiency and developing renewable power could reduce gas demand by around 10% over the next several years and by as much as 15% after a decade. But retrofitting the area's aging and energy-inefficient homes will not be fast or cheap. What remains for Alaska are two main options: get gas from the North Slope to Anchorage, or import liquefied gas from the global market. Building the pipeline could both meet the needs of Alaska's people and bring in money from global sales – though how much revenue depends on how global gas markets change over time and how competitive Alaska gas prices would be relative to other suppliers. Any delays from financial, legal, technical or environmental challenges would balloon costs. But if it succeeded, Anchorage-area customers could see prices drop as low as $2.23 per 1,000 cubic feet – a 75% drop from current prices and 40% lower than in 2005. The savings could significantly bolster the region's economy. Importing is a costly option. A study commissioned by the Alaska Legislature found that imported gas would cost $13.72 per 1,000 cubic feet. That's 60% more than current prices and especially burdensome for Alaska families and businesses, which already pay far higher energy bills than typical American customers. Beyond the economic questions, there's something symbolic at stake: the state's identity. Could a state synonymous with energy production become an energy importer? Many Alaskans see the prospect as an embarrassing paradox – akin to Hawaii importing pineapples or New Mexico importing green chiles. Alaska is not alone in grappling with the tension between energy self-sufficiency and economic efficiency. Across the U.S., states rich in resources have wrestled with the question of whether to prioritize local production or integrate into global markets. Texas produces more oil than any other state, yet it continues to import crude oil due to mismatches between its production and refining capacity. Shaped by globalization, few regions can truly isolate themselves from market forces. Energy production and consumption are increasingly interconnected, meaning pursuit of local self-sufficiency comes at a steep economic cost. That's the question facing Alaska: whether to invest in domestic infrastructure to maintain energy independence, or embrace the flexibility – and potentially lower cost – of global markets. This article is republished from The Conversation, a nonprofit, independent news organization bringing you facts and trustworthy analysis to help you make sense of our complex world. It was written by: Brett Watson, University of Alaska Anchorage Read more: White House plans for Alaskan oil and gas face some hurdles – including from Trump and the petroleum industry Alaska on fire: Thousands of lightning strikes and a warming climate put Alaska on pace for another historic fire season Trump's push to control Greenland echoes US purchase of Alaska from Russia in 1867 Brett Watson receives funding from First National Bank Alaska to conduct research on the Alaska economy, including energy issues. He has previously received funding from Power the Future for work on Alaska mineral issues.
Yahoo
14-04-2025
- Business
- Yahoo
Canada's LNG industry set to take flight as interest reignites in Alaska megaproject
CALGARY — Hundreds of kilometres up the Pacific coast from where Canada's first liquefied natural gas export terminal is set to start up this summer, a monster lays dormant. Alaska has long had ambitions to ship its natural gas to international markets, but the cost and scale of such an undertaking has held it back for decades. But there's been renewed interest in the megaproject since U.S. President Donald Trump issued an executive order on his first day in office devoted to Alaska resource development. State officials, including Gov. Mike Dunleavy, have been busy in recent weeks trying to woo potential Asian buyers of the gas under long-term contracts. Industry experts have doubts the Alaska behemoth will awaken this time, but they say Canada must be mindful of the threat it could pose to its own nascent LNG industry. 'If there's a time to build it, now would probably be your best bet,' Enverus senior analyst Josephine Mills said of the Trump administration's keenness on Alaska gas and the Republicans' control of Congress. 'But then again, this has been being talked about for the past 30, 40 years. It's by no means a new project. So definitely I think it would be faced with a lot of hurdles to come.' With an estimated price tag of US$44 billion, Alaska LNG would see a 1,300-kilometre pipeline traverse the state from north to south, passing through treacherous terrain to deliver an average of 3.5 million mmBTU a day of gas to a liquefaction plant in Nikiski, south of Anchorage. The project also includes a carbon capture plant by the gas fields on Alaska's North Slope. Some of the gas would be for Alaskans' needs, but most would be loaded onto tankers and sold across the Pacific, the same markets Canadian LNG developers want to tap. 'It would be beneficial to Canada to not have Alaska LNG be built,' said Mills. But if it did go ahead — and that's a big if — it would be after 2030, she added. Late last month, the state corporation behind the massive endeavour, Alaska Gasline Development Corp., signed Glenfarne Group as lead developer on the project. Glenfarne, a U.S. builder of energy infrastructure, now owns 75 per cent of the project, AGDC holding the rest. A final investment decision on Alaska LNG is expected some time this year. Kent Fellows, an economist with the University of Calgary's School of Public Policy, said contracts to buy LNG are signed before plants start up and usually span several years. So the trade chaos Trump has unleashed with a bevy of tariffs against one-time allies does the Alaska project no favours. 'It can be really costly to make some of these investments if you're not sure that trade relationship is going to be stable going forward,' Fellows said. 'One of the huge advantages that the United States had up until about 12 months ago (is) they had a reputation for being a very stable economy, being an economy that believed in global free trade.' If Alaska LNG is somehow successful in sewing up contracts with Asian buyers, it makes it harder for B.C. projects further behind in development to secure enough demand to justify their own plants. "With an LNG market, that competition happens at the time the facility is built, so timing the market can end up really, really important," said Fellows. However, the CEO of Canada's biggest natural gas producer said there should be plenty of interest to go around. Mike Rose, who heads up Tourmaline Oil Corp., foresees worldwide demand soaring by up to 50 million mmBTU by 2035. "We won't be oversupplying because there might be a project that comes on in Alaska," he said. "We need all of them." In a speech to Canadian Club Toronto last week, TC Energy chief executive François Poirier said he'd like to see a "Team Canada" approach to developing LNG. TC Energy built the pipeline that ships gas across B.C. to the LNG Canada terminal in Kitimat. "In Alaska, the U.S. administration is today working toward signing (memorandums of understanding) for LNG with countries like Japan and South Korea," Poirier said. "The governor of Alaska has travelled himself to Asia to line up customers and investors for Alaskan LNG, and guess what? He returned from his trip with an agreement from Taiwan." Poirier said no matter which party wins the April 28 federal election, it will be key for the prime minister, premiers, businesses and Indigenous leaders to show a degree of alignment similar to the U.S.. "Collectively, we'll have to travel to Asia and market ourselves and underscore that Canada is back in business and is a good risk to take." This report by The Canadian Press was first published April 14, 2025. Companies in this story: (TSX:TRP, TSX:TOU) Lauren Krugel, The Canadian Press
