$44 billion Alaska gas export plan secures Japan’s JERA offtake
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The Alaska LNG project, valued at $44 billion, stands among the most ambitious energy infrastructure ventures in North America. Led by Glenfarne Group, a US-based investment firm, the project intends to tap natural gas reserves on Alaska’s North Slope and transport the gas via an 800-mile pipeline to a planned liquefaction facility in Nikiski.
Once operational, the facility aims to export around 20 million metric tonnes of liquefied natural gas (LNG) per year. Its strategic location offers a direct, stable route to Asian markets, an alternative to the longer Gulf Coast route that requires transiting the Panama Canal.
As LNG demand continues to grow in East Asia, particularly in Japan and South Korea, the Alaska LNG project is being viewed as both an economic opportunity and a diplomatic tool. It supports the broader US strategy to deepen energy ties with Indo-Pacific allies while reinforcing its position in the global LNG supply chain.
JERA’s 20-year LNG commitment signals renewed confidence in US supply
JERA Co., Inc., Japan’s largest power utility and a major global LNG buyer, has signed a letter of intent to purchase 1 million tonnes of LNG annually for 20 years from the Alaska LNG project. This agreement marks the project’s first publicly disclosed customer commitment since Glenfarne took majority ownership.
The deal allows JERA to strengthen its energy security by diversifying supply and reducing reliance on Russian and Middle Eastern sources. It also supports Japan’s transition to lower-carbon fuels as it gradually reduces dependence on coal.
The timing aligns with Japan’s broader efforts to stabilize long-term fuel imports following disruptions from the war in Ukraine and volatility in LNG spot markets. It also reinforces the strategic energy relationship between Japan and the US, further anchoring Japan’s energy policies to allied supply sources.
For Glenfarne, securing JERA as a foundational buyer provides a boost in credibility as it seeks financing and prepares for a final investment decision.
High costs and logistical barriers remain critical challenges
While the JERA agreement is a milestone, significant hurdles remain. The project still requires multiple regulatory approvals and environmental assessments. Glenfarne has indicated a final investment decision for the pipeline could come in late 2025, followed by a decision on the liquefaction facility in 2026.
Financially, the $44 billion price tag raises concerns over competitiveness. Global inflation, high interest rates, and cautious investor sentiment around fossil fuel infrastructure pose additional challenges. LNG from other regions, including Qatar and Australia, could offer lower costs per unit, potentially affecting Alaska’s export prospects.
The physical buildout is equally complex. Spanning 800 miles of rugged terrain, the pipeline project demands long lead times, specialized equipment, and resilient operations planning. Even under optimal conditions, first gas shipments may not occur until the early 2030s.
Despite these challenges, the Alaska LNG project remains a compelling strategic proposition. For Japan, it opens a path to long-term, politically aligned LNG supply. For the US, it offers another channel to assert energy influence across the Pacific.
The agreement with JERA does not resolve every uncertainty, but it moves the project closer to realization and reaffirms the role of LNG in connecting national interests across oceans.
Source:
Nikkei Asia