By David Brunnstrom
WASHINGTON (Reuters) – Senator Dan Sullivan on Wednesday urged Japan and other U.S. allies in Asia to get behind a multibillion-dollar gas project in his home state of Alaska, warning that if they were not interested in buying the gas, strategic rival China would be.
Sullivan, a Republican, said he would not be surprised if the project, involving a $44 billion gas pipeline in Alaska, comes up when President Donald Trump meets Japanese Prime Minister Shigeru Ishiba at the White House on Friday.
Officials familiar with the matter have told Reuters that Japan is considering offering support for the pipeline as it seeks to court Trump and forestall potential trade friction.
Japan has doubts about the viability of the proposed 800-mile pipeline – intended to link fields in Alaska’s north to a port in the south, where gas would be liquefied and shipped to Asian customers – because of the overall costs of the gas relative to other sources. But it is prepared to offer to explore a deal if asked, the officials said.
Sullivan told Washington’s Center for Strategic and International Studies it was a great opportunity for Japan, as well as U.S. allies South Korea and Taiwan.
“I think they need to be a little bit forward leaning, because if they don’t, you know, we’ll move on to other places,” Sullivan said. “That’s not my preference, to sell this to China, but if the Chinese want to step up and be an anchor tenant, and there’s a lot of private-sector interest now trying to make that happen … maybe that’s the route we go. It’s not my preference, I want to stick with our allies.”
Sullivan said the project would be a great way for Asian allies to reduce their trade deficits and tensions with the U.S.
The most important thing, he said, was to secure long-term contracts to purchase gas, which would enable “some of the biggest investors in the world” to finance the project, but Japanese, Korean and Taiwanese upstream investment was welcome too.
Among the executive orders Trump signed when he took office on Jan. 20 was one promising to unleash Alaska’s resource potential, “including the sale and transportation of Alaskan LNG to other regions of the United States and allied nations within the Pacific region.”
Trump has framed the project, which will carry up to 3.3 billion cubic feet of gas per day, as a win both for Alaska and U.S. allies in Asia seeking a stable source of energy.
Japan already has plentiful access to LNG, and its firms traded some 38 million tonnes last year, more than half its domestic consumption. However, the Alaska pipeline could help diversify away from riskier sources like Russia and the Middle East.
Ishiba said last week that while Tokyo needed to reduce reliance on fossil fuels, “there are things that we should request from the U.S. in terms of stable energy supply.”
The officials who spoke to Reuters cautioned that Ishiba will not be able to make firm commitments on LNG when he meets with Trump. Any deal would have to offer reasonable pricing and flexibility, including allowing Japanese buyers to resell LNG they purchase, one said.
In 2022, Japan’s Mitsubishi reached an agreement with Alaska Gasline Development Corporation, the Alaska state-owned company overseeing the LNG proposal, to assess feasibility of producing ammonia there. Mitsubishi has not committed to the project beyond an assessment.
(Reporting by David Brunnstrom; Editing by Leslie Adler)
