Tokyo Gas Inks Deal to Explore Buying LNG From Alaska Project

(Bloomberg) -- Tokyo Gas Co. has signed a preliminary agreement to explore buying liquefied natural gas from a long-stalled project in Alaska that has been championed by Donald Trump, days ahead of a visit by the US president to Japan.

Japan’s largest gas company signed a non-binding agreement with Glenfarne Group, the developer of the Alaska LNG project, for the potential purchase of 1 million tons a year, Glenfarne said in a statement on Friday. Tokyo Gas said in a separate statement that it would gather information on the project and evaluate its economic viability.

The agreement is a small step forward for Alaska LNG, a $44 billion project that has struggled for decades to secure the binding long-term contracts and investments needed for its development. Japanese participation in “stable and long-term incremental purchases of US energy” — including a possible offtake agreement for Alaskan LNG — was included as part of a wider trade commitment inked in July. Specific details were not disclosed.

That deal resulted in a 15% tariff on imports of all Japanese goods to the US, as well as the creation of a $550 billion investment mechanism through which Tokyo will invest in the US. Details of this funding are expected to be on the agenda when Trump meets Japan’s new Prime Minister Sanae Takaichi next week, part of his tour of Asia.

Preliminary gas offtake deals with Alaska LNG allow Japanese companies to demonstrate commitment to the wider trade package without entering a binding procurement contract. Jera Co., Japan’s largest power producer, signed a similar deal last month.

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