Japanese Companies Hesitant to Join Alaska LNG Project Amid Rising Costs

According to a report by The Yomiuri Shimbun on May 26, Japanese firms are showing reluctance to participate in the $44 billion Alaska liquefied natural gas (LNG) development project. This initiative has garnered significant attention from the Trump administration, which is urging both South Korea and Japan to support it.

Concerns are mounting among Japanese companies regarding soaring costs and logistical challenges associated with the project, with fears that total expenses could surge beyond 100 trillion won (approximately $73 billion)—almost double the initial estimates. The involvement of Japanese firms in this project is becoming increasingly pivotal amid ongoing U.S. tariff negotiations with the two allies.

In an effort to showcase progress in trade discussions, Japanese Prime Minister Shigeru Ishiba is positioning the Alaska LNG venture as a potential bargaining chip ahead of the G7 summit scheduled for July 15–17 in Canada. To further facilitate discussions, the U.S. is hosting an “Alaska LNG Summit” on July 2, inviting South Korea, Japan, Taiwan, and other nations.

The ambitious project entails constructing a 1,300-kilometer pipeline from Alaska’s North Slope to the southern port of Nikiski, navigating through three mountain ranges, including Mount McKinley, under extreme Arctic conditions—a major reason for delays. While President Trump has publicly called on Japan and South Korea to invest trillions in the project, skepticism remains prevalent within Japan’s industry. A major trading company executive noted that completing construction by the planned 2031 production start is “virtually impossible” due to escalating costs and engineering challenges.

Meanwhile, as reported by Asahi Shimbun, Tokyo is exploring the creation of a joint U.S.-Japan fund aimed at revitalizing America’s shipbuilding sector, which includes initiatives for ammonia-fueled ships and icebreakers.