The Trump administration is all for the Alaska LNG project. They’re counting on its ambitious $40 billion price tag to be enough to still attract investors even with the high costs. This project, though, has had a troubled history and has never really gotten started. Alaska LNG has been established as a national priority by President Donald Trump from the day he took office.
The Alaska LNG project is squarely aimed at addressing the state’s declining natural gas production in the Cook Inlet. At the same time, it seeks to meet Alaska’s growing domestic energy needs. The plan would implement the construction of an 800-mile pipeline. This pipeline would carry natural gas from the North Slope, located above the Arctic Circle, to the Cook Inlet. The gas is then cooled and shipped to U.S. allies in Asia. Wait time should be approximately eight days to Japan. This timeline is an order of magnitude shorter than the current U.S. Gulf Coast exports of LNG. Those shipments, which mostly move through the clogged Panama Canal, now take an average of 24 days to reach Japan.
The Alaska LNG project has one big strategic advantage. It sidesteps the fraught shoals of the South China Sea, the traditional shipping route for all LNG exports from the Middle East. For prospective investors, the project’s location and logistics are what makes this investment opportunity particularly alluring. This appeal becomes even more potent when viewed in light of today’s global geopolitical reality.
Even though the project holds great promise, potential Asian investors have expressed concerns about the timeline and logistics of this ambitious project. Energy Secretary Chris Wright has repeatedly said that financing for Alaska LNG wouldn’t be hard. This can only happen if there are sufficient commercial offtakers for the gas.
“If you get the commercial offtakers for the gas, financing is pretty straightforward.” – Energy Secretary Chris Wright
In his remarks, Interior Secretary Doug Burgum shared that stakeholders are already clamoring to sign offtake agreements. What they really want is the gas that will be supplied through this pipeline.
“They’re ready to sign on to take an offtake agreement from this pipeline to get gas to our super strategic, important bases across Alaska.” – Interior Secretary Doug Burgum
Wright noted that many countries around the world are interested in reducing their trade surpluses with the US. They are dramatically increasing their imports of American energy, especially gas imported from American Alaska LNG.
“There are countries around the world looking to shrink their trade deficit with the United States, and of course, a very easy way to do that is to buy more American energy.” – Energy Secretary Chris Wright