Japan's JERA to explore LNG offtake from Alaska's $44 billion export project
FILE PHOTO: The logo of JERA Co., Inc. is displayed at the company office in Tokyo, Japan July 14, 2017. REUTERS/Issei Kato/File Photo
Japan's top power producer, JERA, will explore liquefied natural gas offtake from the Alaska LNG project, JERA and developer Glenfarne said, as talks to ink firm binding sale contracts for the $44-billion project continue.
Since assuming the lead developer role in the Alaska LNG project in March, Glenfarne has lined up preliminary agreements that could lead to offtake from the project's 20 million metric tons a year capacity, including with Taiwan's CPC and Thailand’s PTT, but firm deals have yet to be signed.
On Wednesday, Glenfarne said in a statement it signed a letter of intent with JERA for the sale of 1 million tons a year of LNG from the project over a 20-year term on a free-on-board basis.
The letter of intent will facilitate information exchange and collaboration with Glenfarne as JERA assesses the project's timelines and economics, the Japanese company, a joint venture of Tokyo Electric Power and Chubu Electric Power, said in a separate statement on Thursday.
"This LOI provides a platform for continued dialogue with Glenfarne, and as more details become available, we look forward to deepening our understanding of the project," Ryosuke Tsugaru, JERA's chief low carbon fuel officer, said in the statement.
Glenfarne said it is targeting a final investment decision (FID) for the Alaska LNG pipeline in late 2025 and a 2026 FID for the project's LNG export components.
Since returning to office, U.S. President Donald Trump has pledged to push the project, which aims to transport stranded gas from Alaska's remote north across the state and liquefy it for export.
Despite Trump's optimism, some Japanese officials and energy executives have raised concerns that the project's expected costs could make its gas less competitive than that from other sources.
Reuters reported that Japan had hired consultancy Wood Mackenzie to review the proposed 800-mile (1,287 km) Alaska gas pipeline and LNG plant, signalling that Tokyo is considering deeper involvement in the project.
