The largest gas company in Japan has signed a letter of intent signifying that it would buy up to 1 million tons of liquefied natural gas per year from the proposed trans-Alaska natural gas pipeline. The development moves the project closer to a financial finish line that would allow the borrowing needed to build the project.
Tokyo Gas announced the signing on Friday with Glenfarne, the company developing the project. The announcement came shortly before President Donald Trump’s state visit to Japan.
The pipeline is expected to have a total capacity of 20 million tons per year; Glenfarne said in a statement that the project will “reach a financial close” if there are deals for 16 million tons per year.
With Friday’s announcement, Glenfarne has now announced arrangements totaling 11 million tons, with prospective buyers in Japan, Korea, Taiwan and Thailand.
Tokyo Gas has a long history with Alaska; in 1969, it began importing liquefied natural gas from Cook Inlet, marking the first time the United States had exported liquefied natural gas. The terminal used for those exports was mothballed in 2017 amid the ongoing supply crunch in Cook Inlet.
“This agreement validates the strength of Alaska LNG’s commercial offering and the importance of Alaska LNG as a strategically positioned supplier of affordable, clean LNG for U.S. Pacific allies,” said Glenfarne CEO and founder Brendan Duval in a prepared statement. “Tokyo Gas pioneered the LNG industry with their agreement to purchase LNG from Alaska fifty-five years ago and is one of the most respected voices in the industry. We welcome their participation in Alaska LNG.”
AKLNG, as the pipeline project is known, would consist of a 807-mile pipeline from the North Slope to Cook Inlet, with a processing plant at the northern end and a liquefaction facility at the southern end.
Glenfarne envisions the project as being built in two phases: The first phase would consist of the pipeline itself and supply a limited amount of gas for in-state use. The second phase would include compressor stations and the endcap facilities needed to allow exports.
Glenfarne has said that it intends to complete a go/no-go decision on the first phase by the end of the year.
U.S. Interior Secretary Doug Burgum, speaking at an event hosted by the American Petroleum Institute last week, said he believes the timing for what is known as “front-end engineering and design,” or FEED, remains on track.
“There’s a lot of optimism about the Alaska LNG project, and the FEED study should be coming out in December of this year, and I think that we’re going to see a lot of interest in that project,” Burgum said, according to Reuters.
Later in the week, according to Bloomberg News, Burgum said that an alternative project, which would involve the sale of natural gas directly off the North Slope via icebreaking tankers, has also drawn interest from international investors.
James Brooks is a longtime Alaska reporter, having previously worked at the Anchorage Daily News, Juneau Empire, Kodiak Mirror and Fairbanks Daily News-Miner. This article originally appeared online at alaskabeacon.com. Alaska Beacon, an affiliate of States Newsroom, is an independent, nonpartisan news organization focused on connecting Alaskans to their state government.
