Japan is contemplating backing a $44bn gas pipeline project in Alaska to strengthen ties with US President Donald Trump and mitigate potential trade tensions.
This initiative is expected to be a topic of discussion when Japanese Prime Minister Shigeru Ishiba meets Trump in Washington, reported Reuters, citing sources.
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The proposed 800-mile (1,287.5km) pipeline aims to connect gas fields in northern Alaska to a southern port for liquefaction and shipment to Asian markets.
However, Japan has concerns about the project’s viability due to the high costs compared with other sources. Despite these concerns, Japan is open to exploring a deal if prompted.
Japan may include this commitment alongside other potential concessions such as purchasing more US gas and increasing funds spent on defence to reduce the $56bn (Y8.68trn) bilateral trade deficit and avoid tariffs, the report said.
Trump has highlighted the gas project as beneficial for Alaska and US allies in Asia. His approach to economic and security ties with Japan remains unclear, but the topic remains significant for Japan.
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By GlobalDataAlthough Japan already has substantial access to liquefied natural gas (LNG), the pipeline could help diversify its supplies away from uncertain sources like Russia and the Middle East.
The LNG pipeline was authorised by the Federal Energy Regulatory Commission in 2020, followed by a final legal approval in 2022, despite environmental opposition.
Recently, Alaska Gasline Development Corporation partnered with developer Glenfarne to advance the pipeline.
Prime Minister Ishiba stated in parliament that Japan needs to reduce fossil fuel reliance but did not specify details about the Alaska project.
State banks like the Japan Bank for International Cooperation may finance the project, with trading companies such as Mitsubishi and Mitsui involved, the report added.
Although the US and Japan have historically been strong allies, former President Joe Biden’s recent decision to block Nippon Steel’s proposed takeover of US Steel—a deal that former President Trump also opposed—has raised concerns about the future of the relationship between the two countries.
