Canada’s LNG industry set to take flight as interest reignites in Alaska megaproject

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Hundreds of kilometres up the Pacific coast from where Canada’s first liquefied natural gas export terminal is set to start up this summer, a monster lays dormant.

Alaska has long had ambitions to ship its natural gas to international markets, but the cost and scale of such an undertaking has held it back for decades.

But there’s been renewed interest in the megaproject since U.S. President Donald Trump issued an executive order on his first day in office devoted to Alaska resource development. State officials, including Gov. Mike Dunleavy, have been busy in recent weeks trying to woo potential Asian buyers of the gas under long-term contracts.

Industry experts have doubts the Alaska behemoth will awaken this time, but they say Canada must be mindful of the threat it could pose to its own nascent LNG industry.

“If there’s a time to build it, now would probably be your best bet,” Enverus senior analyst Josephine Mills said of the Trump administration’s keenness on Alaska gas and the Republicans’ control of Congress.

“But then again, this has been being talked about for the past 30, 40 years. It’s by no means a new project. So definitely I think it would be faced with a lot of hurdles to come.”

With an estimated price tag of US$44 billion, Alaska LNG would see a 1,300-kilometre pipeline traverse the state from north to south, passing through treacherous terrain to deliver an average of 3.5 million mmBTU a day of gas to a liquefaction plant in Nikiski, south of Anchorage. The project also includes a carbon capture plant by the gas fields on Alaska’s North Slope.

Some of the gas would be for Alaskans’ needs, but most would be loaded onto tankers and sold across the Pacific, the same markets Canadian LNG developers want to tap.

“It would be beneficial to Canada to not have Alaska LNG be built,” said Mills.

But if it did go ahead — and that’s a big if — it would be after 2030, she added.

Late last month, the state corporation behind the massive endeavour, Alaska Gasline Development Corp., signed Glenfarne Group as lead developer on the project. Glenfarne, a U.S. builder of energy infrastructure, now owns 75 per cent of the project, AGDC holding the rest.

A final investment decision on Alaska LNG is expected some time this year.

Kent Fellows, an economist with the University of Calgary’s School of Public Policy, said contracts to buy LNG are signed before plants start up and usually span several years.

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So the trade chaos Trump has unleashed with a bevy of tariffs against one-time allies does the Alaska project no favours.

“It can be really costly to make some of these investments if you’re not sure that trade relationship is going to be stable going forward,” Fellows said.

“One of the huge advantages that the United States had up until about 12 months ago (is) they had a reputation for being a very stable economy, being an economy that believed in global free trade.”

If Alaska LNG is somehow successful in sewing up contracts with Asian buyers, it makes it harder for B.C. projects further behind in development to secure enough demand to justify their own plants.

“With an LNG market, that competition happens at the time the facility is built, so timing the market can end up really, really important,” said Fellows.

However, the CEO of Canada’s biggest natural gas producer said there should be plenty of interest to go around.

Mike Rose, who heads up Tourmaline Oil Corp., foresees worldwide demand soaring by up to 50 million mmBTU by 2035.

“We won’t be oversupplying because there might be a project that comes on in Alaska,” he said. “We need all of them.”

In a speech to Canadian Club Toronto last week, TC Energy chief executive François Poirier said he’d like to see a “Team Canada” approach to developing LNG.

TC Energy built the pipeline that ships gas across B.C. to the LNG Canada terminal in Kitimat.

“In Alaska, the U.S. administration is today working toward signing (memorandums of understanding) for LNG with countries like Japan and South Korea,” Poirier said.

“The governor of Alaska has travelled himself to Asia to line up customers and investors for Alaskan LNG, and guess what? He returned from his trip with an agreement from Taiwan.”

Poirier said no matter which party wins the April 28 federal election, it will be key for the prime minister, premiers, businesses and Indigenous leaders to show a degree of alignment similar to the U.S..

“Collectively, we’ll have to travel to Asia and market ourselves and underscore that Canada is back in business and is a good risk to take.”

This report by The Canadian Press was first published April 14, 2025.

Companies in this story: (TSX:TRP, TSX:TOU)

Lauren Krugel, The Canadian Press

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