Editorial comment
In US President Donald Trump’s lengthy first address to Congress since returning to the White House, he championed American energy independence, and made a point of mentioning an Alaskan energy project that has been on the drafting table for some time.
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Alaska LNG is a US$44 billion project, proposed by the Alaska Gasline Development Corporation (AGDC), and designed to send natural gas from the North Slope 800 miles south to Nikiski, where it would be cooled to a liquid state and exported, most likely to America’s Pacific allies.
Trump signed an executive order on his first day back in office to “unleash Alaska’s extraordinary resource potential”, and his Congress address signalled full support from the new administration, but the non-contiguous state proves to be a challenging place in which to develop new oil and gas projects. High operational costs, combined with regulatory uncertainty and the lingering threat of litigation from environmental groups, has historically deterred investment. Trump’s renewed support for developing oil and gas in the state is a move formwards, but it’s not enough.
Representatives for the project have been seeking support from international investors: most recently, Alaska Governor Mike Dunleavy and energy officials visited South Korea to discuss energy cooperation. The delegation included officials from the Glenfarne Group, a partner in the project. Trump has named Japan, South Korea and other nations as potential investors in the pipeline project, citing trillions of dollars up for grabs. In February, Trump announced a JV for the project with Japanese Prime Minister Shigeru Ishiba, and similar preliminary agreements exist with China and Taiwan.
A gas sales precedent exists with Great Bear Pantheon (an Alaska-based exploration company and wholly owned subsidiary of Pantheon Resources Plc) to buy up to 500 million ft3/d of gas from the project, but no binding agreements are in place.
Late in 2024, the project secured a US$50 million pledge from state developers, which will go some way towards lowering the risk for any investing party coming onboard to develop and build. America’s Asian allies may currently be more amenable to investing in getting the project built – despite a Pacific-wide shift towards renewable energy – as a way of fending off potential tariff threats from the US.
In our upcoming Americas issue, published in July, David Hobbs and Pat Galvin from Pantheon Resources Plc discuss efforts to unlock North Slope gas, and why the recent discovery of low-CO2 natural gas is now seen as a game changer for the Alaska LNG Project. The article describes how phasing the project will be the key to getting it built: “The full Alaska LNG export project plan includes three major infrastructure components: the 800 mile 42 in. pipeline across Alaska, a large gas conditioning plant on the North Slope to remove the relatively large amounts of CO2 contained in the gas produced at Prudhoe Bay, and the 20 million tpy tidewater liquefaction plant in Nikiski, Alaska [...]The value in constructing Phase 1 of the Alaska LNG project first is that the part of the project considered the riskiest to outside investors, the pipeline, is seen by in-state stakeholders looking to avoid an energy shortfall as the most valuable part of the project. This phase satisfies Alaska’s long-term energy security and lowers the risk profiles for the conditioning plant and liquefaction facility.”
Perhaps the best approach is to align the project’s phasing with both market appetite and in-state energy needs; delivering early value while building momentum and investor confidence for the full buildout. This strategy could prove pivotal in turning long-standing ambitions into reality.
