Japan has reportedly tapped global consultancy Wood Mackenzie to study the long-proposed Alaska LNG pipeline and export terminal, signaling Tokyo is taking a closer look at whether to back a $44 billion megaproject long championed by Washington. Two sources with direct knowledge told Reuters the assessment aims to reassure wary Japanese investors and utilities still uncertain about the venture’s economics.
The Alaska LNG project involves an 800-mile gas pipeline running from Alaska’s North Slope to a liquefaction plant on the southern coast, enabling stranded reserves to reach global markets. Despite decades of planning, the sheer cost and remoteness have left the project on ice. Now, with President Donald Trump promising to push it forward as part of a broader energy diplomacy effort, Tokyo’s involvement could prove decisive.
Trump last month touted the idea of a U.S.-Japan joint venture tied to a wider trade deal, though Tokyo has yet to confirm any such commitment. The final agreement did, however, include language on exploring new offtake contracts for Alaskan LNG and a sweeping pledge of $550 billion in Japanese investment across U.S. sectors such as energy and pipelines.
Japan’s Ministry of Economy, Trade and Industry (METI) declined to comment on the Wood Mackenzie contract, while the consultancy itself, project developer Glenfarne, and the state-owned Alaska Gasline Development Corporation (AGDC) offered no immediate response to Reuters.
Behind closed doors, Japanese officials are weighing the benefits of a secure U.S. supply against the project’s notorious cost hurdles. Energy Minister Yoji Muto said in July that Tokyo continues “close discussions with U.S. officials on the economic viability, a forecast for starting production, and the form of cooperation” needed to make LNG procurement work for both sides.
Securing Japanese participation would mark a breakthrough. Japan remains the world’s second-largest LNG buyer and has become an increasingly active player in global gas infrastructure. Support from Japanese firms could unlock state bank financing through institutions like the Japan Bank for International Cooperation (JBIC), which earlier this year said it would consider lending if Japanese companies were involved.
As always, economics will ultimately decide the fate of this project. Global LNG markets have cooled since prices soared in 2022, and new supply from Qatar and the U.S. Gulf Coast is expected to enter the market later this decade, potentially putting downward pressure on prices.
Security interests will also play a key role, however, with U.S. officials emphasizing that Alaskan shipments would be closer to Japan than Middle Eastern cargoes and avoid chokepoints such as the Strait of Hormuz or the South China Sea. With Tokyo now sourcing around 10% of its LNG from the U.S., 10% from Russia, and roughly 40% from Australia, diversifying supply has become a priority.
By Charles Kennedy for Oilprice.com
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