US close to LNG deal with Japan in major $44 billion Alaska LNG project
Subscribe to our free newsletter today to keep up to date with the latest energy, oil and gas news.
President Donald Trump’s July 22 announcement that the United States and Japan would form a joint venture around Alaska’s LNG infrastructure has reignited attention to a project that has lingered in uncertainty for more than a decade. With a projected cost of $44 billion, the Alaska LNG initiative represents one of the largest energy infrastructure proposals in North America. It aims to ship natural gas from the North Slope to Asian markets via an 800-mile pipeline and a liquefaction terminal at Nikiski.
The news came during bilateral trade negotiations between the United States and Japan, where Trump also unveiled reciprocal tariffs and $550 billion in Japanese investment targets. He described the LNG venture as a strategic element of a broader trade agenda, citing energy security, economic growth and geopolitical leverage.
For Alaska, the announcement was framed as a breakthrough. State officials, including Gov. Mike Dunleavy and Sen. Dan Sullivan, have long courted Japanese participation as a way to revive the project following years of shifting leadership, regulatory hurdles and a lack of committed export partners. The state retains a 25 percent stake in the development, while Glenfarne Group holds the remaining 75 percent.
Despite the statement, the confirmation is not backed by binding commitments. Japanese officials were quick to qualify the statement, noting that discussions are ongoing and no formal agreement has been signed.
Japan’s cautious stance highlights uncertainty around real investment
Japan’s Ministry of Economy, Trade and Industry, as well as key LNG buyers such as JERA and Tokyo Gas, stated they were unaware of a finalized joint venture. While Japan remains one of the world’s largest LNG importers, its recent procurement strategy has focused on diversification and minimizing risk rather than capital-intensive investments.
Cost remains a key issue. At $44 billion, the Alaska LNG project’s scale rivals that of Qatari and Gulf Coast export facilities, but with higher infrastructure costs due to Arctic geography. Japanese companies have favored lower-cost, quicker-return assets such as spot market purchases and equity stakes in existing operations.
Energy policy in Japan has shifted amid climate commitments and geopolitical uncertainty. The government has pledged to cut fossil fuel dependency and expand renewable sources, raising regulatory and political barriers to long-term fossil infrastructure like Alaska LNG.
While METI has included Alaska as a potential long-term energy partner and the Japan Bank for International Cooperation has backed US energy projects in the past, Japan’s current posture reflects evaluation, not commitment.
Alaska LNG project profile shows decades of preparation and legal clearance
The Alaska LNG project has moved from a conceptual export scheme to a fully approved infrastructure plan. Initially led by the Alaska Gasline Development Corp., the project received regulatory approval from the Federal Energy Regulatory Commission in 2020. Its export permit for non–free trade agreement countries was upheld by a federal appeals court in April 2025.
The plan includes a gas treatment plant on the North Slope, an 800-mile pipeline and a liquefaction facility on the Kenai Peninsula with a capacity of 20 million tonnes of LNG per year. Environmental reviews, route mapping and public consultations have taken place for more than a decade.
Financially, the 2024 entry of Glenfarne Group injected new life into the project. The Houston-based firm now holds the majority stake and has indicated plans to reach a final investment decision by the end of 2025. That decision depends heavily on export agreements and financial commitments, both still in development.
Environmental and financial critiques challenge the feasibility of the venture
Environmental advocates in both countries have challenged the project’s climate footprint. Critics argue that new LNG infrastructure undercuts global climate goals and extends fossil fuel reliance. The project’s projected operational timeline into the 2040s poses additional long-term risks.
Indigenous communities in Alaska have raised concerns about impacts on land, wildlife and subsistence resources. While lawsuits have yet to succeed, social and reputational risks remain.
Financial analysts also question the project’s viability. Global LNG markets have become more volatile, and competition from other suppliers, especially those with lower costs, could make Alaska LNG less attractive. Long-term buyers are increasingly demanding flexible, shorter-term contracts that may not align with the project’s financial structure.
Strategic benefits and geopolitical context of the proposed LNG partnership
Despite the risks, the proposed US–Japan partnership could offer strategic value. Japan continues to reduce its LNG imports from Russia and views US energy as a more stable alternative. A formal venture with Alaska would offer an additional safeguard against geopolitical disruptions and support Japan’s economic security.
For the United States, the project symbolizes a broader push for energy dominance. Including LNG in trade negotiations adds leverage and helps address the longstanding trade imbalance with Japan.
While federal agencies previously supported similar projects through loan guarantees, it remains unclear whether this administration will offer equivalent support. Congressional action and policy decisions from the Department of Energy will influence next steps.
Sources