By Katya Golubkova, Yuka Obayashi and Tim Kelly
TOKYO (Reuters) -Alaska’s governor and state representatives will visit Japan and three other Asian countries starting this week to court investors for a natural gas project that President Donald Trump says could pump trillions of dollars into the U.S., although Japanese energy firms remain sceptical.
Officials from the state-run Alaska Gasline Development Corporation (AGDC) and development partner Glenfarne Group will visit allied Asian countries “to update industry leaders on Alaska LNG’s economic and strategic competitive advantages, and discuss opportunities for participation”, said AGDC spokesperson Tim Fitzpatrick.
The officials want to transport gas south from Alaska’s remote north via a $44 billion 1,300-km (800-mile) pipeline, to be shipped as liquefied natural gas to Japan, South Korea and Taiwan.
The trip, which Alaska Governor Mike Dunleavy will also be taking, runs from March 19 to March 30 with visits to Taiwan, Thailand, South Korea and Japan.
“He’s going to be going over there to hold high-level discussions with the leaders in all those countries and corporate executives to talk about the pipeline,” said Jeff Turner, Dunleavy’s spokesperson. “If we can get a pipeline project going, we can certainly be a steady supplier of LNG to the Pacific Rim.”
Dunleavy said last week that exports could begin by 2030 and deliver about 3.5 billion cubic feet of gas per day.
Trump is pushing energy sales to Asian allies while threatening trade tariffs, reviving Alaska’s stalled LNG ambitions. On February 7, he asked Japanese Prime Minister Shigeru Ishiba for support and on March 4 South Korea agreed to discuss the project. The same day Trump told Congress that Japan and South Korea wanted to partner on Alaskan LNG.
The “project has tremendous support and momentum. We expect commitments from Japan, South Korea, Taiwan and other countries across Asia will be announced in the near future,” Glenfarne said in an email.
South Korea’s industry ministry said AGDC had asked for a meeting, but that nothing has been decided.
RESERVATIONS
Despite Trump’s claim that Japan wants in, Japanese energy firms have yet to commit.
“Companies are interested in it, but still have a lot of reservations,” said Hiroshi Hashimoto, a senior analyst at the government-affiliated Institute of Energy Economics, adding that the project’s higher costs had been a focal point for years.
Potential investors include Japan’s biggest oil and gas explorer Inpex Corp, trading firms Mitsubishi Corp and Mitsui & Co, top LNG buyer JERA, and the government’s Japan Organization for Metals and Energy Security (JOGMEC) and the Japan Bank of International Cooperation, which finance overseas energy projects, two sources familiar with AGDC’s outreach said on condition of anonymity.
“The question is whether it can be economically sustainable,” Inpex CEO Takayuki Ueda said at a briefing last month. Alaska’s extreme cold and the pipeline’s scale had hindered progress, he added.
The government, Inpex’s largest shareholder, has not given any guidance on Alaska, a company spokesperson said.
The companies, including Inpex, and the banks declined to say whether they will meet the Alaskan representatives in Tokyo.
Fitzpatrick said the natural gas feedstock is inexpensive in Alaska which means the project can compete with projects on the U.S. Gulf Coast, despite the initial costs.
Meanwhile, diplomatic pressure on Ishiba to ease trade frictions with U.S. gas imports looks set to intensify.
“Japan has committed to reduce the trade deficit with us and its reliance on Russia by purchasing U.S. liquefied natural gas. I will hold them to that promise,” George Glass, Trump’s pick for Japan ambassador, said at his Senate confirmation hearing on Thursday.
(Reporting by Katya Golubkova, Yuka Obayashi, Tim Kelly and John Geddie, additional reporting by Timothy Gardner in Washington and Joyce Lee in Seoul; Editing by Himani Sarkar and Nia Williams)
