President Donald Trump said Friday that Japan would soon begin importing record amounts of liquefied natural gas from Alaska.
But plans for the $44 billion Alaska LNG project — the lone LNG export project in the state — don’t call for exports of gas until 2031.
And that’s if the project can be built at all.
Alaska politicians and the project owner, the Alaska Gasline Development Corp., praised the benefit of such a transaction on Friday.
But an Alaska oil and gas analyst said the announcement doesn’t change anything for the state’s decades-long attempts to export natural gas from the North Slope to other countries.
Trump, in a news conference with Japanese Prime Minister Shigeru Ishiba in the White House, said:
“Japan will soon begin importing historic new shipments of clean American liquefied natural gas in record numbers,” Trump said.
“We’re talking about the pipeline in Alaska, which is the closest point of major oil and gas to Japan by far, less than half the distance of any other location. We’re talking about a joint venture of some type between Japan and us having to do with Alaska oil and gas.”
Trump said his administration and Japan are very excited about it.
Ishiba said importing more LNG from the U.S. is “really wonderful for us.”
Larry Persily, an oil and gas analyst and former state deputy commissioner of revenue, said Japanese companies have studied efforts in Alaska to export its North Slope gas and walked away from it in the end. They’ll do that again this time, he asserted.
The project is too costly to develop and there are other options for Japan, including the LNG Canada project that’s being developed in Kitimat, B.C. Mitsubishi, a Japanese conglomerate, is an investor in that project, which plans to ship liquefied natural gas to Japan and other countries, Persily said.
Persily noted that Canada is not much farther away from Japan than Alaska.
“As usual, the president gets his facts and timeline confused,” Persily said. “My takeaway is Japan doesn’t want to be lumped in with Mexico and Canada and threats of tariffs and other temper tantrums from the new president. So they said, ‘Gee, we’ll look at it.’ ”
“So it’s a smart political move by Japan,” he said. “They’ll study it for a few years. And then Trump will be gone.”
The Alaska LNG project, the latest iteration of the state’s effort to capitalize on North Slope gas, has been in the works for more than a decade.
Costs, and the project’s huge facilities, have stymied efforts to build it.
The project envisions development of an 800-mile pipeline delivering natural gas from the North Slope. The gas would be liquefied in Nikiski on the Kenai Peninsula and exported to Asian markets in oceangoing tankers.
Board members for the project last year had suggested shutting the project down if enough progress was not made.
But Glenfarne, a New York-based company pursuing LNG export projects in the Lower 48, said recently that it had a deal with the Alaska gas line agency to pursue development of the project, including the export facility and the pipeline.
That has helped give the project new life.
Still, Alaska LNG remains in the study phase. And it faces numerous hurdles, including no certainty on where the $44 billion to actually build it would come from.
Tim Fitzpatrick, a spokesperson with the Alaska Gasline Development Corp., said Friday that 2031 is the plan for first gas exports from the project.
He said the project has been engaged with numerous Japanese energy organizations for several years, including Chiyoda, an engineering firm that has helped design the proposed LNG plant in Nikiski.
“Alaska LNG’s competitive cost, abundant supply, and close proximity to Japan make this project a vital trade and energy security enhancement for our two nations,” the gas line agency said in a statement Friday. “We welcome further Japanese support and engagement and look forward to continuing our discussions following today’s important advancements.”
Developing Alaska LNG will have a positive $10 billion impact on the U.S. balance of trade, the statement said.
In prepared statements Friday, Alaska Gov. Mike Dunleavy, U.S. Sen. Dan Sullivan and Rep. Nick Begich III praised Trump for supporting the Alaska LNG project.
“As we move this project along, we look forward to working with President Trump, Japanese officials, and others to put project agreements in place ASAP. Thank you, President Trump!” Dunleavy said.
On Jan. 20, the day Trump returned to office, he issued an executive order designed to boost development of Alaska’s natural resources.
Among other things, the presidential order sought to prioritize “the development of Alaska’s liquified natural gas (LNG) potential, including the sale and transportation of Alaskan LNG to other regions of the United States and allied nations with the Pacific region.”