On September 8th, Alaska's Department of Natural Resources and Japan’s Agency for Natural Resources and Energy signed a memorandum of understanding (MOU) to secure low-cost and stable exports of liquefied natural gas (LNG) from the North Slope region. According to the MOU, Alaska will provide updates and reports on the progress of the project while Japan’s trade ministry will provide its projected LNG demand and information on policy support.
The proposed LNG project includes a liquefaction plant and terminal on Japan’s Kenai Peninsula, a gas treatment plant on Alaska’s North Slope, an 800-mile pipeline, and various stations and take-off points for gas delivery. While preliminary studies are still being conducted, the project is expected to cost between $45 billion and $65 billion.
Japanese companies Tokyo Electric Power and Tokyo Gas were among the first importers of Alaskan LNG starting in 1969. From 2008-2011, Tokyo Gas continued to import Alaskan LNG until the end of the contract. In July 2014, Alaska state and Exxon Mobile Corp and its partners requested federal approval to export 20 million tonnes of LNG annually to Japan.
A steady supply of low-cost fuel is crucial for Japan, which is almost 100% dependent on imports for energy. In mid-September 2014, a delegation of BP executives and Alaskan state government officials visited China, South Korea, and Japan to meet with prospective buyers of Alaskan LNG. Last year, Japan Bank for International Cooperation and the Alaskan Department of Natural Resources signed a MOU and in the future, Japan may invest directly in the North Slope LNG project.
Ties between Alaska and Japan are not solely focused on energy, as community-level relations are also strong. This September, Palmer City of Alaska received seven Japanese students from Saroma, Hokkaido prefecture, as part of a 20-year long Sister-City Exchange program. The strength of the exchange program is attributed to Japan’s close proximity to Alaska -- a five hour direct flight -- and the fact that Japan was the number one buyer of oil from the state from 1996-2004. The relationship between Saroma and Palmer is so strong that Saroma declined government funding from the Japanese English Teaching (JET) program in order to hire English teachers strictly from Palmer, supported through local funding.
Melissa Newcomb recently graduated from American University SIS and is a Research Intern at the East-West Center in Washington, D.C.