Alaska LNG could cost more than double Gulf Coast rivals, raising questions over economics

U.S. President Donald Trump's $54 billion plan to invest South Korean funds into Alaska LNG has raised questions about the project's economic viability. The proposed 20 million-ton-a-year export project would cost more than double a comparable U.S. Gulf Coast plant. South Korea has yet to decide whether to fund the project, which would need to meet commercial thresholds for investment.

The lead developer Glenfarne Group estimates the project's cost at $44.5 billion to $54.5 billion, or roughly $2.2 billion to $2.7 billion per million metric tons per annum. By contrast, the average cost of U.S. LNG projects since Russia's invasion of Ukraine has been about $1 billion per mtpa. The Alaska LNG project would require an 800-mile pipeline from the North Slope to Nikiski, estimated at $13.2 billion to $16.9 billion.

In addition to the pipeline, the project needs a large treatment plant on the North Slope and a liquefaction terminal, with costs estimated at $7.7 billion to $9.2 billion and $23.6 billion to $28.4 billion respectively. Alaska LNG supporters argue that its location offers a strategic advantage, with cargoes reaching key Asian importers faster than Gulf Coast shipments, potentially lowering shipping costs. However, Canadian projects in the region could have advantages over Alaska LNG.