Japan’s leading power producer, JERA, is considering Alaska as a possible source for liquefied natural gas (LNG), according to a Reuters report.
This comes as Japanese officials are scheduled to travel to the US this week for further discussions on tariffs.
The proposed $44 billion Alaska LNG project, encompassing a pipeline and LNG plant, is central to President Donald Trump’s strategy for engaging Asian partners.
He seeks backing for this large-scale endeavor from Japan, South Korea, and Taiwan.
JERA executive Naohiro Maekawa was quoted in the report:
From the perspective of energy security and supply stability…we would like to consider Alaska as one of the promising suppliers, among various other options.
Tariffs hit Japan
Trump’s trade policies have significantly impacted Japan, most notably through the imposition of a 24% tariff on Japanese exports to the US.
This substantial levy, targeting a wide range of goods, has the potential to significantly disrupt the established trade relationship between the two nations.
However, in a move indicative of a negotiation-focused approach, this 24% tariff has been temporarily suspended, with its re-implementation scheduled for early July.
This pause provides a window for diplomatic discussions aimed at resolving the underlying trade disputes.
Beyond this specific, albeit suspended, tariff, other trade measures affecting Japan remain in effect.
A universal 10% tariff applies to a broad spectrum of imported goods entering the US, adding a baseline cost to Japanese exports.
Furthermore, the US has maintained a 25% duty specifically targeting automobiles.
This is particularly significant given the central role of the automotive industry in Japan’s export-oriented economy.
Negotiators meet
Japanese trade negotiator Ryosei Akazawa will meet with US officials later this week for another round of tariff negotiations.
Japan stands as the world’s second-largest LNG importer, following China, and sources the majority of its supply from Australia.
Within Japan, JERA holds the position of the leading LNG purchaser, with yearly acquisitions reaching approximately 35 million metric tons.
JERA’s Maekawa noted:
Asia-Oceania currently accounts for more than half of our procurement sources.
For supply stability, expanding options to regions like North America and the Middle East would be beneficial.
Maekawa stressed the importance of expanding the portfolio further. Currently, JERA obtains approximately 10% of its LNG supply from the United States.
Industry sources indicate that Japanese companies are hesitant to make definitive commitments due to elevated construction expenses and a lack of concrete project specifics.
Tokyo Gas CFO Taku Minami noted on Monday that Alaska LNG’s proximity to Japan and straightforward transportation routes without canals or straits are potential advantages for this significant Japanese LNG importer.
However, he also pointed out that the project’s development cost, particularly the long pipeline, is still undetermined.
Profits fall
JERA reported on Monday that its annual net profit decreased by half due to the underperformance of its international power generation and renewable energy sectors.
For the fiscal year ending in March, net income reached 184 billion yen ($1.3 billion).
However, the company anticipates a profit recovery in the current fiscal year, forecasting 230 billion yen.
JERA reported that its spot LNG procurement reached approximately 5 million tons in fiscal year 2024-25.
This represents an increase compared to the previous fiscal year’s procurement of 4.5 million tons, the company stated.
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