Alaska LNG project economics are captured in this data-file, capable of landing gas into Asia at $9/mcf while also earning a 10% project-level IRR, as long as the total project can be delivered on time and on budget at $44bn. Inflation to $60bn erodes the IRR to 6% or requires a $12/mcf landed price into Asia.
The Alaska LNG project is a vast US LNG mega-project, which seems to have gathered momentum in 2025 in our LNG supply outlook. It is possibly made more attractive as the US looks to improve its trade balance with Asia; and as some commentators wonder whether L48 gas resources are maturing and/or domestic demand should be prioritized for these suppliers.
The Alaska LNG project is planning to commercialize 30TCF of stranded resources from the North Slope, via an 800-mile gas pipeline, then a 20MTpa LNG project, costing at least $40bn, employing 12,000 construction workers at peak and deploying over 1.5MT of steel.
Alaska LNG project economics are calculated in this data-file, in NPV, IRR and $/mcf cost terms, but also comparing the $44bn project capex budget, line by line against our other data-files, such as pipeline costs, liquefaction costs, CO2 capture costs, CO2 disposal costs and LNG transportation.
Alaska LNG has stated that it can deliver LNG to Asia at $6.6/mcf, but we think this only yields a 7% project-level IRR. A 10% IRR, which is the hurdle we use for Gulf Coast liquefaction projects, would more likely require $8/mcf FOB from the plant, which in turn yields a $9/mcf delivered price to Asia.
The great advantages of the Alaska project are the vastness of the resources, available at around $1/mcf, as Prudhoe Bay and Point Thomson are currently producing and reinjecting around 8bcfd of associated gas, plus Prudhoe Bay has a large gas cap. In addition, the project site at Nikiski is just 4,500-miles from Japan, less than half the distance from the US Gulf Coast, and avoids transit via the Panama Canal.
Disadvantages of the Alaska LNG project are its remote location and CO2 content. The gas at Prudhoe Bay is 12% CO2. Point Thomson is 4%. That means the project will have to dispose of 7MTpa of CO2. Although 45Q credits help the economics. Second, almost half of the project capex will be spent on constructing a large new gas pipeline running North-South across Alaska, anchored in the permafrost, then crossing the Cook Inlet, which could incur a major cost blow-out.
Execution is the key question mark, as earlier attempts to develop the project quoted a range of $45-60bn. At the upper end of this range, the project would require $12/mcf FOB pricing, resulting in $13/mcf delivered to Asia, which is significantly less attractive compared with Gulf Coast LNG. Please download the data-file to stress-test Alaska LNG project economics.