Japan weighs Alaska LNG pipeline pledge to win Trump's favour

Sources say:

• Japan considers support for Alaska gas project to forestall trade tensions with US
• Japan doubts pipeline viability but may explore deal if asked by Trump
• Trump and Japan PM Ishiba expected to meet as soon as next week

Japan is considering offering support for a $44 billion gas pipeline in Alaska as it seeks to court US President Donald Trump and forestall potential trade friction, according to three officials familiar with the matter.

Officials in Tokyo expect Trump may raise the project, which he has said is key for US prosperity and security when he meets Japanese Prime Minister Shigeru Ishiba for the first time in Washington as soon as next week, the sources said.

Japan has doubts about the viability of the proposed 800-mile pipeline – intended to link fields in Alaska's north to a port in the south, where gas would be liquefied and shipped to Asian customers – because of the overall costs of the gas relative to other sources. But it is prepared to offer to explore a deal if asked, the officials said.

Tokyo may include such a commitment among other concessions, such as buying more US gas and increasing defence spending and manufacturing investment in the US, to reduce the $56 billion bilateral trade deficit and stave off the threat of tariffs, one of the people said.

The White House did not immediately respond to a request for comment about the meeting. Japan's foreign ministry said it was premature to discuss the matter.

Details of Japan's possible interest in the Alaska project have not been previously reported. The officials spoke on the condition of anonymity because they were not authorised to talk to the media.

Among the executive orders Trump signed when he took office on 20 January was one promising to unleash Alaska's resource potential, "including the sale and transportation of Alaskan LNG to other regions of the United States and allied nations within the Pacific region".

Trump has framed the gas project as a win for Alaska and US allies in Asia seeking a stable source of energy. But Japan already has plentiful access to LNG, and its companies traded some 38 million tonnes last year, more than half its domestic consumption.

Still, the Alaska pipeline could help Japan diversify supplies away from riskier sources like Russia, which accounts for about one-tenth of its gas imports, and the Middle East.

Ishiba said in parliament on Friday that while Japan needed to reduce reliance on fossil fuels, "there are things that we should request from the US in terms of stable energy supply". He did not give specifics nor mention the Alaska project.

The officials cautioned that Ishiba will not be able to make firm commitments on LNG, including investing in the Alaska project, when he meets Trump. Any deal would have to offer reasonable pricing and flexibility, including allowing Japanese buyers to resell LNG they purchase, a fourth official said.

Tariff threat

Trump has mooted a range of tariffs on foreign goods but revealed little about his approach to economic and security ties with Japan since his return to the White House.

But the subject has dominated political discourse in Japan, a key US ally and top foreign investor, which was rattled during Trump's first term by his tariffs on steel imports and his demands for Tokyo to pay more to host American troops.

Media attention in Tokyo has centred on whether Ishiba, who became prime minister last year and heads a minority government, can replicate the bond that former Japanese leader Shinzo Abe forged with Trump during his first term.

Abe, who was assassinated in 2022, was the first foreign leader to meet Trump after his 2016 election win, and the pair became close confidants and golfing partners.

Without such familiarity with Trump's inner circle, Ishiba's administration has sought counsel from US lawmakers and policy experts with ties to both Japan and Trump. They include Senator Bill Hagerty of Tennessee, a former U.S. ambassador to Tokyo, and Kenneth Weinstein, the Japan chair at the Hudson Institute, a conservative think tank.

Weinstein told Reuters he had encouraged Japan to deepen energy partnerships with the US and that the Alaska project warranted serious consideration. Hagerty's office did not respond to questions.

Ado Machida, a Tokyo-based businessman who served on Trump's transition team after his 2016 election victory, said an offer by Japan to buy more LNG and support the Alaska LNG pipeline would be "probably the easiest" way to win over Trump.

"Trump's going to want to know what Japan will do for him," said Machida, adding that he had spoken to Japanese government officials about the proposal.

State banks such as the Japan Bank for International Cooperation (JBIC) could provide financing for the Alaska project to trading firms such as Mitsubishi Corp (8058.T) and Mitsui & Co (8031.T), which Japan relies on to secure oil, gas and coal reserves overseas, one of the officials said.

In 2022, Mitsubishi reached an agreement with Alaska Gasline Development Corporation (AGDC), the state-owned company overseeing the LNG proposal, to assess the feasibility of producing ammonia there. Mitsubishi has not committed to the project beyond an assessment.

Mitsubishi and Mitsui declined to comment on potential investments and discussions about the Alaska LNG project. JBIC said it would consider providing support on a case-by-case basis, taking into account factors such as any involvement by Japanese companies.

In a statement to Reuters, a spokesperson for AGDC said it had held talks with Japanese energy leaders about the project, without offering specifics.

First approved during Trump's earlier term, the project received Federal Energy Regulatory Commission authorisation in 2020 and final legal approval in 2022, despite opposition from environmental groups.

This month, AGDC said it had entered into an agreement with developer Glenfarne to advance the pipeline.