US President Donald Trump’s push to steer $54 billion of South Korean investment into Alaska liquefied natural gas is drawing fresh attention to a proposed 20-million-ton-a-year export project whose estimated cost is more than twice that of comparable facilities on the US Gulf Coast.
Trump unveiled the investment plan on Wednesday as part of a broader $200 billion South Korean package. Seoul said it had not yet decided whether to invest in Alaska LNG and would first assess the project’s commercial viability.
“The question is whether Asian buyers are willing to pay a premium in exchange for security of supply. So far, we have not seen evidence of that,” said Jason Feer, head of business intelligence at Poten & Partners.
Lead developer Glenfarne Group estimates the Alaska LNG project will cost between $44.5 billion and $54.5 billion. That equates to roughly $2.2 billion to $2.7 billion for each million metric tons per annum (mtpa) of capacity, making it the highest-cost US LNG export project ever proposed, according to the estimates cited in the source.
Projects approved in the US since Russia’s invasion of Ukraine have generally been built for about $1 billion per mtpa of capacity or less. Cheniere Energy’s Corpus Christi Stage 3 expansion, for example, was estimated at about $8 billion for an additional 10.5 mtpa, equivalent to roughly $760 million per mtpa. Venture Global’s Plaquemines LNG represents about $21 billion of investment for 20 mtpa, while NextDecade’s Rio Grande LNG and Woodside Energy’s Louisiana LNG are also close to the $1 billion-per-mtpa threshold.
The higher cost of Alaska LNG reflects the infrastructure required to move gas from the state’s North Slope to the export terminal. Unlike Gulf Coast projects, which draw on extensive gas networks supplied by shale production in Texas, Louisiana and Appalachia, Alaska LNG would require an 800-mile (1,287-kilometre) pipeline from the North Slope to Nikiski.
The pipeline is estimated to cost between $13.2 billion and $16.9 billion. The project would also require a large gas treatment facility on the North Slope before the fuel could be transported south. Glenfarne estimates that facility at $7.7 billion to $9.2 billion, while the liquefaction terminal is expected to cost between $23.6 billion and $28.4 billion.
The scale of the investment has prompted doubts about whether the project can secure financing on commercial terms. Alex Munton, director of global gas and LNG research at Rapidan Energy Group, said Alaska LNG “may not be able to meet commercial thresholds for investment.”
Glenfarne did not immediately respond to a request for comment. Its chief executive, Brendan Duval, said on Wednesday that Trump’s announcement would help bring “together the capital needed to accelerate Alaska LNG to a final investment decision and construction.”
Supporters of the project argue that its location could provide an advantage in Asian markets. LNG cargoes from Alaska would reach major importers including Japan, South Korea and Taiwan significantly faster than shipments from the US Gulf Coast, potentially reducing transport costs.
Jack Weixel of East Daley Analytics said Asian buyers seeking stable and secure gas supplies “may be willing to pay a premium”, while noting that Canadian projects could have advantages over Alaska LNG. He said developers should consider “any and all options” as global natural-gas demand grows, particularly among non-OECD countries, adding: “But, some will work better than others.”
