Japan is reportedly weighing support for a $44 billion gas pipeline project in Alaska as part of efforts to strengthen relations with US President Donald Trump and mitigate potential trade tensions, according to Reuters.
The move comes ahead of a planned meeting between Trump and Japanese Prime Minister Shigeru Ishiba in Washington, where the pipeline project is expected to be discussed.
The proposed 800-mile pipeline would transport natural gas from Alaska’s northern fields to a southern port, where it would be liquefied and shipped to Asian markets. While Japan has reservations about the project’s economic viability due to high costs compared to other gas sources, it is prepared to explore a deal if requested by the US.
Tokyo may also offer additional concessions, such as increasing purchases of US liquefied natural gas (LNG), boosting defence spending, and expanding manufacturing investments in the US. The measures aim to reduce the $56 billion bilateral trade deficit and avoid potential tariffs on Japanese goods.
Strategic energy diversification
Although Japan already has significant access to LNG, the Alaska pipeline could help diversify its energy supplies, reducing reliance on riskier sources like Russia and the Middle East. Prime Minister Ishiba recently emphasised the importance of securing stable energy supplies from the US, though he did not specifically mention the Alaska project.
However, officials caution that Japan cannot make firm commitments on LNG investments during Ishiba’s meeting with Trump. Any deal would need to offer competitive pricing and flexibility, including the ability for Japanese buyers to resell LNG.
Trump has previously floated tariffs on foreign goods, and Japan remains wary of potential trade friction, particularly after facing steel tariffs and demands for increased contributions to US troop hosting costs during Trump’s first term.
To navigate the challenges, Ishiba’s administration has sought advice from US lawmakers and policy experts with ties to both Japan and Trump, including Senator Bill Hagerty and Kenneth Weinstein of the Hudson Institute. Weinstein has encouraged Japan to deepen energy partnerships with the US, describing the Alaska project as worthy of serious consideration.
Potential financing and partnerships
State-backed institutions like the Japan Bank for International Cooperation (JBIC) could provide financing for the Alaska project, with Japanese trading firms such as Mitsubishi Corp and Mitsui & Co potentially contributing to the initiative.
The Alaska Gasline Development Corporation (AGDC), which oversees the project, has held discussions with Japanese energy leaders, though specifics remain undisclosed. The pipeline, first approved during Trump’s earlier term, received final regulatory go-ahead in 2022 despite opposition from environmental groups.
Japan’s potential support for the Alaska LNG pipeline reflects a delicate balancing act between securing energy diversification and appeasing Trump’s economic demands. As Ishiba prepares to meet Trump, the outcome of the discussions could shape the future of US-Japan relations and energy co-operation in the Indo-Pacific region.
