On today’s episode of the Kenai Conversation, we’re focusing on the global liquefied natural gas market as it relates to the Alaska LNG Project. That’s the proposed 800-mile pipeline that’d move gas from the North Slope to a liquefaction facility in Nikiski.
Up first, we’re joined by Anne-Sophie Corbeau, a global research scholar for Columbia University’s Center on Global Energy Policy.
Then, we’ll hear from River Davis, a Tokyo-based reporter for The New York Times, whose work includes coverage of the Alaska LNG Project.
Transcript of Anne-Sophie Corbeau
Ashlyn O’Hara (AO): So, Anne-Sophie, I just wanted to thank you again for being available today. I was going to say good morning, but of course, it's good evening in Paris, right?
Anne-Sophie Corbeau (ASC): Indeed, yes, it's pretty late in the afternoon in Paris.
AO: So first, as you already know, our topic today is the Alaska LNG Project, but then also, more broadly, the global liquefied natural gas (LNG) market, which, it's my understanding, that's kind of your forte. Could you maybe – can we start with a little bit of introduction? Could you tell me about the type of research that you do and what your work is on this topic?
ASC: Indeed. So I work on natural gas and also on (muffled) hydrogen, and in particular on natural gas, I have been working for a pretty long time on LNG. I actually wrote a book in collaboration with the Oxford Institute for Energy Studies that was almost 10 years ago, and it was looking at the previous big cycle in terms of LNG addition. So this was exactly when the US was about to start exporting LNG from the Lower 48 because, of course, as you know, being in Alaska, the U.S. actually started exporting LNG a long time ago. It was in, out of my memory, 1969 but Kenai, in Alaska, started exporting and exported, actually to Japan. When we are looking at the global LNG market – so to give you kind of a broad picture, we have a global gas market which is about 4000 billion cubic meters (BCM), and the global LNG market is roughly 560 billion cubic meters in 2024. So, roughly every one out of eight molecules in the world is exported as LNG. And right now, the largest LNG exporter is the United States, followed by Qatar and Australia. And then there are a certain number of countries, but they are well, well, well below, like roughly, I mean, Qatar and Australia had about 100 billion cubic meters. Russia, which I think in 2024 was the fourth one, is about 40 billion cubic meters. So you see that there is a big gap between the top – so the United States about 120 BCM in 2024, Qatar and Australia about 100-105 BCM, and then the rest. And in terms of the big markets, where the largest LNG importer has been China in 2024, but of course, Europe has become a pretty important market for LNG because of what happened since 2022, when Russia has progressively cut the gas through European countries, which has been progressively replaced by energy, but not entirely because also demand in Europe has declined massively because of the very high gas prices, and also because there has been a lot of demand destruction and efficiency and replacement by renewable. But it's fair to say that, you know, still the majority of gas demand in the world … is coming from Asia. And when you are looking at the future, this is definitely where demand is expected to grow. And in particular, looking at countries like China, India, Southeast Asia, all these countries, you know, they are really the future for global LNG demand growth. Europe, I would say, you know, we are a relatively mature market. So, yes, there has been a tremendous increase in terms of imports in LNG. So, between 2021, just before the crisis in 2022, it was increased by 50 BCM. So that was huge. And a lot of that came, of course, from the United States, which was increasing its energy import/export capacity at that time and also, you know, there has been some diversion. But going forward, I mean, our gas demand is not going to increase that much. Actually, I will tell you that it's going to start dwindling. And of course, LNG imports will kind of follow the same patterns. That's why I'm saying. You know, the countries to look at are really in developing Asia.
AO: And so I think that's, like, extremely helpful context to kind of characterize who exactly the customers might be at this point. Because, as you might know, our governor here in Alaska just got back from kind of a worldwide tour of Asia and the Middle East, where he's trying to kind of pitch this, this big Alaska LNG project to try and secure buyers. I guess from, you know, given everything that you just said, where exactly does the Alaska LNG Project, you know, kind of fit in this, this global market? Are, you know, do folks think of it as a legitimate potential source of new LNG? I mean, as you're saying, that that demand is kind of waning. Well, I guess, what, what are you hearing about this, this Alaska project, specifically?
ASC: Mainly hearing people being really concerned about the cost of this project, and what that means from the commercial perspective. I mean, you have to understand that, you know, potential buyers, they're interested in having, you know, LNG which is affordable, but at least competitive, you know. And I think this is their main concern. If you are asking on other considerations, such as a distance to the market, if you are asking, you know, the Japanese, the Koreans, the Taiwanese. I mean, from a distance perspective, this is indeed much better. And I think this is a key advantage that the Alaskan energy project has against other projects in the Gulf Coast, because the Gulf Coast projects, in order to go to Asia, preferentially, they would actually go through the Panama Canal. But at the beginning of last year, there was a lot of concerns about that route because the water levels there were very low. So, LNG cargoes had difficulties going through the Panama Canal. Therefore, they had to go either below South America and then up to Japan/Korea, or they had to go through the long route below (Africa) and then up to Asia, because we had also some issues with the Suez Canal because of the attack from the Houthi. So we had two basically big LNG bottlenecks. But Alaska LNG, if you are looking at where it is compared to the Northeast Asian market, from a distance perspective, this is great, and this is a big advantage. But what people are really seeing right now, it's the announced price tag, which is $44 billion. The fact that we are talking about tariffs on steel and aluminum, which, of course, are being used in the constructions, already, we are thinking, OK, there is going to be potentially an additional increase, that there is a very long pipeline involved. So they are really concerned that this is going to be another big mega project, which, like a lot of other big mega projects, are going to see the cost going through the roof. And I'm just looking at the example from Australia, for example, we have a lot of projects such as Gorgon — so their price and their costs increasing massively — and that this is not going to be great. And that also might be delayed. Because, you know, big projects, traditionally, they tend to be delayed. I mean, this is kind of normal in the LNG industry. Nothing specific against Alaska, but you know, not all energy projects, especially when they are big, are actually delivered on time, with the exception of the Calcasieu Pass, and the Plaquemines, because they have a specific construction design, you know, it's more modular, and therefore it goes relatively fast. But this project would be huge. I mean, you know, we are talking about 20 million tonne. It's, it's a project. I mean, this is like 25% of the current Japanese LNG demand. That's not a small thing, if you are really looking at it. So you know, in order to absorb that, that means that you need to have a lot of long term consumers and customers who are interested in this project from a commercial perspective. And this is where I think, you know, the Japanese, Korea, the Taiwanese, they are expressing interest also because, you know, they have been told this is part of the whole negotiation on tariffs, but they are concerned about the cost. And you need to think, how are we going to decrease the cost of that big project, unless you have a big tax exemption, which maybe your government is not so keen to giving? I mean, I don't know how if that can be changed.
AO: And I do have a couple of follow up questions just on things that you just mentioned. I think it would be helpful too. I guess, when you're characterizing maybe interest or concern from different countries about this resource, I guess, what is your communication look like with — I guess, how frequently are you communicating with stakeholders in other countries? Is that part of your research? I guess, where is that coming up. How are you, you know, gleaning these insights from folks?
ASC: It's coming from, you know, the different private conversation, it’s also coming from, you know, a lot of exchanges that I have with different people, different analysts, who are looking at exactly the same thing as myself. And, you know, I mean I have been in this industry for long enough. I remember, you know, looking at kind of the same project with different players, of course, like 12, 13, years ago, when I was still at the International Energy Agency. I mean, this is a project which has been, you know, talked about for many, many, many years. So it's kind of, I have to be very honest, I was not expecting to see this project coming back, because, you know, I mean, we are looking right now — and maybe this is something very important for people listening to you — we are looking at the largest ever increase in terms of LNG export capacity. This is happening between now — with the projects such as Plaquemines and Corpus Christi in the US Gulf Coast — and 2030 when we have the last project from Qatar, from Mozambique, and also the recently sanctioned Louisiana LNG project, also in the US Gulf Coast, coming online. This is huge, 50% additional LNG export capacity. And the big question that everybody asks is, is there going to be enough demand to absorb all that LNG? So just to give you kind of a picture, this increase in terms of LNG export capacity worldwide is more than the current demand in developing Asia. So if I am taking, you know, China, India, Southeast Asia, all together, this is more than their demand. So you need their demand to basically double within the next five years in order to absorb all that gas. And considering that some of these countries have started importing energy kind of a long time ago — I mean, for China and India, it was in the mid-2000s — you can understand that, you know, there are some legitimate question marks about whether there is enough demand in the world to absorb all that LNG. So, granted, you cannot look at the current LNG supply in isolation. So current LNG supply from a certain number of countries, there are more than 20 LNG exporting countries right now, it's kind of coming down, you know? I mean, we have seen that, for example, energy supply from Trinidad and Tobago has been coming down. This has been the same in a certain number of other countries, such as Indonesia. So this is not a stable picture. But even considering that, I mean the numbers in terms of additional LNG export capacity are gigantic.
AO: That I feel like is such an important point, because as, I mean, as I mentioned, our, you know, our governor has been kind of shopping this project around the world, and at this point, you know, we're, we're speaking on on May 2 in the morning, at least in Alaska. But there are no binding off take agreements for the gas that would be, you know, produced through this project. There's no agreements like that at this time. And, you know, thinking about the global like whether or not the global demand exists, I guess how much of the I'm jumping around a little bit as you mentioned, this project kind of first got its legs about 1012, years ago, and kind of faded away. Now the interest, you know, really soared after Russia's invasion of Ukraine, and now it's getting a lot of attention at from our federal government, how much, from your understanding, are tariff threats shaping the interest in this project? Is it? I don't know if artificial is the right word to use, but do you think we'd be seeing as much interest right now if other countries weren't worried about the financial implications of not getting on board?
ASC: Yes, I think, I mean, this is a very legitimate question, and I am pretty sure, you know, I mean, pretty much all the companies from the different countries are expressing some interest, because, you know, their governments in general, are worried about the tariff implication and the relatively high tariffs, which were announced a few weeks ago. That is an absolute certainty, because otherwise, I mean, let's be frank, you know, I mean, there are a lot of other projects in the United States which are also, you know, competing against Alaska LNG. And, you know, I mean, just to give you an example, the projects which were sanctioned at the beginning of this week. So Woodside LNG is about 20% smaller than Alaska LNG, so this is already a pretty big project as well. And this project, you know, doesn't have completely long-term contracts. I mean, they have one long-term contract, there is a company behind that project is going to take some of the energy in order to market it itself. But, you know, I think for Alaska LNG, I mean, they would definitely be looking at having, you know, certain number of long term contracts. And on average, you know, long term contracts, this is one to 2 million tonne of LNG, so you would need something like between 10 and 20 long term contracts. I mean, the maximum that we have seen in terms of long term contracts, in terms of sizes recently has been 4 million tonne. But that was … Chinese companies. And you know that the situation between the US and China is not great right now because of the tariffs, actually, there has been a tit-for-tat escalation, so that right now, the number of cargos from the United States imported by China is exactly zero. No more LNG imports coming from the United States. All the cargos are going to Europe, and the relationship are a little bit frosty. And again, China is the largest LNG importer. So considering that this is a certain time in six years that you know such a description is happening. You can have a question mark about, you know, is it really wise to basically close the door to the largest LNG importer? This is as if you have the largest LNG exporter and the largest LNG importer, they are not talking to each other. That's kind of polarized. I mean, you know, if you are removing suddenly a big chunk of the global LNG market. And I would say, I mean, I am going to be very honest again, you are looking at Japan, and you are looking at Taiwan, you are looking at Korea, I know that we have tended to be a bit more positive compared to before, especially considering Japan, which was before. I mean, the Mets he was considering declining energy demand, and energy demand has actually declined over the past few years, but it's not going to be a fantastically growing market. I mean, let's face it, you know, Japanese population is in decline, so the only kind of glimmer of hope that I am hearing from my friends in Japan is okay, there is potentially more demand coming because data centers, AI, etc, okay. Youknow, fundamentally, this is not going to be a market which is going to be doubling in size over the next 5, 10, 15 years. But they want to have more energy. That is a fact, especially because they are a little bit concerned about Australia, LNG, and whether Australian LNG is going to be always delivered in terms of quantity, prices, etc. Because, you know, the projects in Australia have not been always satisfactory in terms of deliveries. And therefore, you know, I mean, Australia is actually looking at importing energy itself.
AO: And you probably already know this, but you know, Alaska is in kind of a similar position where, you know, locally here on the Kenai Peninsula, which is the county that I live in, that we report out of, you know, we are facing our own natural gas shortfalls, so there's tremendous interest and possibly reserving the, you know, part of those that LNG for local use, what you mentioned data centers, and that is something that our state government here has talked about a lot as being a potential, you know, something that could happen Here there being interest in Alaska as a potential data center geography, because it's colder here and, you know, we've got a lot of land. Are there any examples of a data center like that be like using LNG other in other parts of the world? I guess, any successful examples of that business model being deployed?
ASC: I don't think they are yet, at least to my knowledge. The thing is that many of the companies which are behind the data centers, they have also, you know, some pledges in terms of reduction of greenhouse gas emissions. So yes, the advantage of using natural gas is that you have constant supply, but the disadvantage is that this is also CO2 emission intensive. So maybe this is not a concern for the governor or … Alaska for the time being, it may become one in the future. It may become also a concern for the companies. Of course, it's much better than renewables, because renewables, by definition, are intermittent. That is when you are looking at wind and solar, although I mean hydro, however, is much more interesting. And you are certainly aware that a lot of companies are also looking at nuclear — also a source of clean electricity, which is also a big advantage when you are behind a data center. So all these different options are considered. I think the big question is, really, you know, I mean, how fast and and where exactly is demand for data centers going to grow? And I think there are still a lot of question marks right now on that because, you know, given the current atmosphere, many countries may not be very interested in having, you know, all their data localized in the United States.
AO: Why do you say that?
ASC: Well, I think there have been some threats, you know, regarding Windows and, you know, the ability of providing cloud services to Europe. So I think maybe some countries will be looking at having, you know, everything localized domestically, rather than in a different country, just out of security.
AO: And I do want to talk about renewable energy, because there, of course, there's a lot of questions, if not necessarily in Alaska, because we are a state that loves oil and gas and fossil fuels, then you know the maybe energy market at a from a larger perspective about the environmental concerns associated with building an 800 mile pipeline. I guess you know when you look at is, are renewables or the desire to pivot to more renewable energy sources shaping the the global energy policy conversation in a significant way, or is it? Is that not really a factor at this point?
ASC: It really depends which countries you are looking at. So if you are like myself, based in Europe, of course, I mean developing renewables is absolutely essential, and more and more of the electricity is actually based on clean energy sources, whether we are looking at nuclear, at hydro, or at renewable energy sources such as wind and solar. I would say the same about China, which, in fact, in terms of development of wind and solar, as which their 2030 target as of last year — and this 2030 target was basically given at the beginning of their last five year plan in 2020, so this is, like, amazing — the growth of renewables in China is is going so fast it's almost difficult to trace. So, you know, this is very important. When I talk also to Indian people, I mean the development of renewable capacity, even if it does not reach, you know, the very ambitious targets that the government had, has been also kind of exceptional. So it is important. But of course, there are a lot of people who are going to say yes, but this is not going as fast as it's needed in order to basically reverse the trend in terms of gain the Bank of .. so we shall see. I think people now have been also looking at natural gas and energy from a different perspective, which is, you know, the cost and the volatility of the prices. Let's not forget that we have been on a roller coaster in terms of prices. I mean, I know in Europe, usually prices of natural gas or LNG were in the $6 to $8 per MMBtu. When it was expensive, it was $10 to $12. I mean, we went one day in terms of daily high gas prices at $100 per MMBtu. I mean, the gas prices have been over $50 per MMBtu quite a lot during 2022 and the same kind of gas prices were also found for Southeast Asian buyers, which usually buy part of their gas on the global energy market, so spot LNG cargoes, and they were totally unable to buy those LNG cargoes because they were way too expensive. So now, you know, there is kind of a perception about, Okay, do I want to trust, you know, LNG? Because, you know, is it reliable? Is it affordable? And I think this is a very, very important question. It's also why, you know, country like China, for example, I mean, okay, they have been contracting a lot of LNG, but at the same time they have been also we started building coal fire plans, because for them, coal, you know, a lot of it is domestic, it's affordable, it's synonymous of security, of supply. So you need to take all these considerations into account.
AO: And one, are there any other projects like the Alaska LNG project around the world, that would maybe be competing for the same markets or the same customers? Are there any other similar proposals happening anywhere else?
ASC: There are a few, just see your neighbors, for example, from Canada, you know, they have their own gas, and they are looking for outlets for this gas. And a lot of the projects are actually located on the west coast. Argentina is also, you know, trying also to market their own gas, because they have relatively sizable share gas resources. We have also some prospects in Mozambique and Tanzania in West Africa, Senegal and Bolivian. We have also some prospects in Papua, New Guinea. So, you know, we have a lot of projects. And of course, there is still Russia, which is still, you know, looking at diversifying its outlets because of the fact that the gas supplies to Europe are now significantly declined. I mean, we were at 140 BCM in 2021 and now there is only about 15 BCM left. So, you know, they are trying to diversify away from, you know, their pipeline bases. And China doesn't seem to be particularly keen to get, you know, additional pipeline gas from Russia. So maybe, you know, they will try to increase their LNG export capacity. But that, of course, has been prevented in particular by the previous US administration, which has targeted, so first of all, the Arctic LNG 2 project which was under construction, which was literally, I mean, killed by the previous administration and the sanctions. So it has not been able to start despite the attempts. And there are so two smaller LNG projects in Russia, Vysotsk and Portovaya, which have been also stopped earlier this year because of the last sanctions from the Biden administration. So question marking is also, you know, on the current administration, especially you know this potential peace agreement of Ukraine — is that going to result into lower sanctions on Russia, which will then see the potential return of Russian pipeline gas to Europe and potential return of project sanctions by the previous administration? And of course, you know I mean conversely, you can say, well the more Russian gas and Russian LNG that is on the water, the lower the prospectives for US LNG, whatever it is — coming from the Gulf Coast or coming from Alaska.
AO: And then one more question, because I know I'm trying to be mindful of your time from your perspective you mentioned, and certainly folks here in Alaska, see, one of the Alaska LNG project's biggest strengths is proximity to Asian markets and not having to go around South America. I guess, when you look at where the last LNG project maybe stacks up compared to some of these other global proposals are, is there anything else that maybe makes it stand out? Are, I guess, maybe, what are some of its unique attributes, or are they exclusively proximity to Asia?
ASC: I think this is really it. I mean, this is really the proximity to Asia, and this is what people would be looking at. And of course, you know, this is the current US presidency, which is trying to convince Asian buyers to buy Alaskan energy as well.
AO: Well, Anne-Sophie, thank you so, so much for joining us today. I really appreciate all of this insight and you taking the time to, you know, participate all the way from Paris. Thank you very much.
ASC: Thank you very much for the invitation.
