The Financial Times reported on the 13th, local time, that the Alaska natural gas development project designed to realize Donald Trump's vision has been put to the test [INDEX].

According to the newspaper, U.S. energy developer Glenfarne Group is pushing for the Alaska LNG project (estimated at $54.5 billion), while Gentry Beach, an investment firm with ties to Donald Trump's family, is pursuing the Polar LNG project (estimated at $25 billion).

The two companies argue that disruptions to Middle Eastern LNG supplies caused by the war with Iran have increased interest in their projects, which feature the shortest routes—taking just over a week—to major Asian markets.

However, both projects face growing risks of construction delays due to development costs, funding gaps, and extreme cold that limits the construction window to just three to four months a year. They are also pressed by a political deadline to secure project approval before the Trump administration's term ends in 2029.

Because the region is ecologically sensitive, opposition to fossil fuel infrastructure construction is also strong.

In the case of Alaska LNG, which is further along than the other project, three major oil companies—ExxonMobil, BP, and ConocoPhillips—initially supported it, but pulled out one after another in 2016 due to cost concerns, handing management rights over to the state-run Alaska Gasline Development Corporation (AGDC).

Glenfarne acquired the project last year after the Trump administration promoted investment in Alaska LNG.

Brendan Duval, CEO of Glenfarne Group, stated last month that the Alaska state legislature's failure to pass a tax incentive bill delayed the first phase of the 1,190-kilometer pipeline construction project stretching from the Prudhoe Bay gas field on the North Slope to the Nikiski terminal on the southern coast.

He also added that making a final investment decision on the liquefaction facility, planned at a scale of 20 million tons (t) per year, requires securing binding purchase agreements for an additional 3 million tons of LNG.

Alex Munton, an analyst at Rapidan Energy Group, pointed out the risk of cost overruns for the pipeline construction (estimated at $17 billion), noting, "ExxonMobil and North Slope producers reviewed this project closely and concluded it did not make sense for them."

The Polar LNG project, which is at an earlier stage than Alaska LNG, involves purchasing gas from the North Slope and transporting it to a liquefaction facility in the coastal village of Wainwright, located 427 kilometers away in a straight line to the west.

The company intends to use existing technology and equipment owned by Russian firm Novatek to save costs and time.

Novatek is the company that built the Arctic LNG 2 and Yamal LNG plants in the Arctic Circle.

Novatek stated that these plants will be constructed off-site and transported once ready for operation.

The issue is that Novatek is subject to some of the sanctions imposed by the United States and Ukraine's European allies.

Sources said that the U.S. and Russia have discussed a plan for Novatek to lease technology and equipment to the Polar LNG project on the condition that sanctions on Novatek's Arctic LNG 2 project are lifted.

This is because Polar LNG requires U.S. government approval to purchase equipment from Novatek's projects, which remain under sanctions imposed by the Biden administration.

Meanwhile, the U.S. Congress is facing a vote as early as next week on a harsher anti-Russia sanctions bill led by Republican Senator Lindsey Graham.

Novatek stated, "We are very eager to participate in LNG plant construction projects that use our technology" and added that it had signed a memorandum of understanding (MOU) with Polar LNG.

Novatek denied that its participation was conditional on the lifting of sanctions.

Gentry Beach, head of Polar LNG, said, "Public sentiment toward Russia has turned very negative," adding, "The U.S. government will have to decide what technology to use."

He also argued that sanctions on the Arctic LNG 2 project are allowing China to snap up LNG supplies at cheap prices, stating, "All we are doing is handing our enemies cheap weapons to use against us."

Both projects are also struggling to attract Asian companies.

So far, POSCO International is the only Asian company to have made an equity investment.

Analysts also point to political risks.

With the pro-fossil fuel Trump administration scheduled to leave office in 2029, concerns are raised that a future Democratic administration could abort the project, similar to how former President Joe Biden canceled key permits for the Keystone XL pipeline on his first day in office in 2021.

"Alaska's oil and gas are sensitive issues and carry political risks accordingly," Munton said.

(Photo: AP, Yonhap News)