Japan Considers Backing Alaska Gas Pipeline to Boost Trade Relations with United States

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Japan Considers Backing Alaska Gas Pipeline to Boost Trade Relations with United States

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A pipeline in Alaska, USA (© Shutterstock/Galyna Andrushko)
A pipeline in Alaska, USA (© Shutterstock/Galyna Andrushko)

Japan is considering an investment in a $44 billion gas pipeline project in Alaska to forge closer ties with the US and possibly ease trade tensions, according to sources cited by Reuters.

The 800-mile pipeline would link gas fields in northern Alaska to a southern port, allowing for liquefaction and shipping to Asian markets.

Although it is a more expensive source for Japan compared with other gas supplies, if invited, Japan may be willing to conclude a deal for the project. The commitment would be presented, among other compromises, to increase the consumption of US gas and military supplies in an effort to decrease the $56 billion bilateral trade balance and circumvent the threat of tariffs.

Washington has trumpeted the project as a godsend for Alaska and its Asian allies. In the meantime, the current administration's approach to Japan in terms of economic and security ties is still not clear, although the issue is considered to be substantial.

The Alaska Gas Pipeline-accepted by the Federal Energy Regulatory Commission in 2020, but finalized in 2022 amidst environmental opposition-took a vital step in February with the unveiling of a partnership between the Alaska Gasline Development Corporation and developer Glenfarne to advance the project.

While Prime Minister Ishiba has acknowledged the need for Japan to shift away from fossil fuels, he has not commented on the Alaska project. State banks, including the Japan Bank for International Cooperation, would be a likely source of financing, along with trading companies such as Mitsubishi and Mitsui.