The Alaska LNG project has faced a complicated economic landscape, marked by heightened global trade tensions and rising project costs.
Since Donald Trump’s presidency, the dynamics surrounding the project have shifted, with new interest from Asian countries such as Japan, South Korea, and Taiwan, amid ongoing concerns regarding its high costs.
Previously, the project garnered little interest due to its hefty expenditures, including the additional costs of an 800-mile pipeline and significant processing required to remove CO2 from North Slope gas.
In 2022, the Alaska Gasline Development Corp. (AGDC) estimated these expenses at $22 billion, a figure likely to rise to $25 billion due to inflation.
These costs are in addition to the $20 billion earmarked for the liquefaction and export facility, making the overall financial burden prohibitive for many potential Asian customers who are reluctant to invest heavily in a project they view as overly expensive.
The change in sentiment towards the Alaska LNG project during the Trump administration coincided with his trade policy, which aimed at utilizing tariffs as leverage.
Some Alaskans have expressed optimism over the project’s future, particularly with AGDC entering into a partnership with Glenfarne, a company with limited experience in LNG exports.
However, the details of this agreement remain opaque, with significant financial arrangements in place, including a guarantee of $50 million from the Alaska Industrial Development and Export Authority (AIDEA) should the project be halted.
Glenfarne claims it could reach a final investment decision (FID) this year after expending $150 million—about 0.3% of the total project cost.
Conventional wisdom suggests that for a project of this scale, an investment of 5%-10% is typically required prior to FID, indicating that the current spending is insufficient.
While during his campaign, President Trump vowed to curb inflation and resolve international disputes, his strategies regarding tariffs have been constrained by market realities.
Recent financial turmoil led to a pause in implementing envisioned global tariffs, causing uncertainty in how the Alaska project will proceed.
The Asian market’s response to these developments remains unpredictable, particularly given their existing hesitance toward the Alaska LNG project.
If tariffs are reinstated, exporters might find it difficult to justify preferential treatment for Alaska, as current plans suggest a standard 10% tariff in many cases.
The long-term viability of exporting Alaska’s gas hinges not only on evaluating the project’s economic merits but also on the sustainability of U.S. trade policies and market conditions.
As election cycles loom, with potential shifts in Congressional control and the presidential seat, investor confidence remains low.
Given the U.S. trade imbalances with over 100 countries, unilateral, country-specific tariffs could provoke discord and instability, echoing the recent volatility in financial markets.
The future of the Alaska LNG project seems predicated on political maneuvering and the result of potential strong-arming tactics, which, as seen in recent events, may yield limited outcomes.
image source from：https://www.adn.com/opinions/2025/04/18/opinion-can-the-alaska-lng-project-be-coerced-into-existence/
