Alaska LNG Project Defends High Costs with Shipping Savings

The developer of the Alaska LNG project argues that significant cost savings in shipping justify the massive investment required for the initiative. Tim Fitzpatrick, communications director for Glenfarne, the project's developer, stated that shipping gas to Asia from Alaska’s North Slope would be at least 65% cheaper than shipping LNG from the Gulf Coast once the project is completed.

The proposed project, supported by former President Donald Trump, involves an 800-mile pipeline transporting gas from Alaska’s North Slope to a liquefied natural gas export plant in southern Alaska. Critics have raised concerns about the project’s estimated cost of $44.5 billion to $54.5 billion, which translates to roughly $2.2 billion to $2.7 billion per million tons per annum (MTPA) of LNG capacity. This cost is notably higher than many recently approved Gulf Coast developments.

Glenfarne defends the project by arguing that the comparison is misleading because it includes the expense of necessary infrastructure. The company states that the Alaska LNG project entails about $1.4 billion per MTPA in delivery costs, making it competitive when measured by delivered LNG costs rather than upfront spending. The company has so far identified customers for 13 million tons per year of LNG and needs 16 million tons annually to support project financing.

Trump recently mentioned that South Korea will help finance the Alaska LNG effort as part of a $200 billion package of investment in US projects. However, Seoul quickly clarified that its role in the Alaska project is not yet set.