Alaska LNG shipping cost savings defend billions in project investment

The developer of the Alaska LNG project claims that the initiative’s shipping savings will offset its high infrastructure costs, making it competitive with other US LNG exports. The project, backed by former President Donald Trump, aims to transport natural gas from Alaska’s North Slope through an 800-mile pipeline to a liquefaction plant in southern Alaska. Once operational, shipping LNG from Alaska to Asia will be at least 65% cheaper than sending it from the Gulf Coast, according to Tim Fitzpatrick, communications director for developer Glenfarne.

Critics have raised concerns about the project’s estimated cost, ranging from $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 is significantly higher than recent Gulf Coast developments, which average around $1 billion per MTPA. Glenfarne argues that the comparison is misleading because it includes the expense of necessary pipeline and gas treatment infrastructure to access stranded North Slope gas. The company asserts that the project’s competitiveness should be measured by delivered LNG costs rather than upfront spending.

Glenfarne has identified customers for 13 million tons per year of LNG and needs 16 million tons annually to secure project financing. Trump recently stated that South Korea will help finance the Alaska LNG effort as part of a $200 billion investment package in US projects. However, South Korea later clarified that its role in the project is not yet finalized.