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Economy

Japan Considers Supporting Alaska LNG Pipeline to Strengthen U.S. Relations

Friday 31 January 2025 - 11:35

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Japan is contemplating backing a $44 billion gas pipeline project in Alaska as part of efforts to strengthen its relationship with U.S. President Donald Trump and avoid potential trade conflicts. Japanese officials anticipate that Trump may bring up the project, which he believes is essential for U.S. prosperity and security, during an upcoming meeting with Japanese Prime Minister Shigeru Ishiba.

Although Japan has concerns regarding the high costs of the proposed 800-mile pipeline, which would transport natural gas from Alaska’s northern fields to a southern port for liquefaction and export to Asia, officials are open to exploring the project if requested.

In exchange, Japan may offer additional concessions, such as increased purchases of U.S. gas, a rise in defense spending, and more investments in U.S. manufacturing, in order to reduce the $56 billion bilateral trade deficit and mitigate the risk of tariffs.

Despite these considerations, Japanese officials caution that Prime Minister Ishiba will not be able to make firm commitments on LNG investments during the meeting. Any deal would need to involve reasonable pricing and flexibility, including the ability for Japanese buyers to resell the LNG.

The pipeline project, first initiated during Trump’s earlier administration, has sparked discussions in Japan, where there is increasing focus on the need to secure stable energy supplies. While Japan is eager to reduce its dependence on fossil fuels, Prime Minister Ishiba has stated that it must also seek stable energy imports from allies like the U.S.

The Japan Bank for International Cooperation (JBIC) could potentially finance the project, while trading firms like Mitsubishi and Mitsui might also play a role. Mitsubishi has already conducted feasibility assessments regarding ammonia production in Alaska but has not committed further to the project.