Alaska LNG meeting unlikely to lead to major deals, report says
Reuters reports that while U.S. officials have invited Asian nations to Alaska to talk about Alaska LNG in early June, it is unlikely that any major deals will be announced.
”Japanese and Korean officials and executives have sounded caution on the project which has been in the works for decades but which has made little progress due to cost and other challenges. South Korean Trade Minister Ahn Duk-geun said last week his government had been invited but that the timing was ‘very tricky.’ South Korea holds a presidential election on June 3. Japan's Trade Minister Yoji Muto has also been invited, sources said. A Japanese government source said it would be difficult for Muto to attend due to parliamentary commitments,” Reuters reported May 23.
In April, the New York Times reported that Trump aides hoped to be able to announce actual deals in June before Gov. Mike Dunleavy’s “sustainable” energy conference. Three members of Trump’s cabinet are expected to attend.
Last month the Times said the Trump administration wants a “formal commitment within the next few weeks to a $44 billion natural gas project in Alaska.” The Times cited three anonymous sources about the meeting.
“The project’s proponents want to be able to announce at the summit that they have received signed letters of intent from Japan and South Korea to invest in Alaska LNG or purchase its gas, the people said. Taiwan formally signed a similar letter of intent to purchase gas from Alaska LNG last month,” the Times said.
The lack of trust in Trump remains the biggest threat to any gasline.
Trump can’t stop blinking as he backs away from Liberation Day—his failed attempt to show dominance over world trade with his idiotic tariffs. The Koreans and Japanese will not be tricked by the Trump pressure campaign. The Trump demand for haste will be met with patience.
Meanwhile, the report below from the Japan News highlights worries in Japan about the Alaska LNG project the Trump administration is trying to coerce Asian nations into supporting.
The biggest unknown is the cost, as the $44 billion estimate is some years out of date.
Here is a summary from Larry Persily’s digest of oil and gas news:
While U.S. President Donald Trump is expecting Japan, South Korea and other countries to participate in the development of the Alaska LNG project, doing so is expected to require over ¥6 trillion, prompting some major trading companies and energy companies to question the profitability of the project.
The issue of the Alaska LNG project may seem to have emerged out of nowhere. However, for officials in the energy industry, the project has been discussed for over two decades.
The Alaska Gasline Development Corp. aims to start production in 2031. However, the construction of the pipeline will need to be done in a harsh environment.
“I don’t think construction can be completed by 2031,” said a major trading company executive.
Some believe the construction costs could balloon to more than ¥10 trillion due to recent inflation. ($70 billion US)
Kenichi Hori, president of Mitsui & Co., Ltd., said, “It is necessary to thoroughly examine the economic potential and long-term sustainability of the entire project.”
Dunleavy has argued that by breaking the project into three separate and smaller projects—the pipeline, the gas treatment plant and the gas export facility—Asian nations will look at the project in a more favorable light and think of it as a less expensive undertaking.
"The biggest hurdle for people to get over is this concept that the project is too big. And it was for some too big. But now when you look at it in terms of piecing it out, as we explain that to our friends in the countries we went to, they understand it,” he said recently.
I suspect Dunleavy is wrong about this.