Japan’s LNG investment model supports maritime business

By Marek Grzybowski

The FSRU terminal in Gdańsk is part of a larger “puzzle” known as the “Japanese model” of LNG investment. The Port of Gdańsk Business Mixer will take place in Tokyo in a few weeks. Attendees will have the opportunity to speak directly with Japanese importers, distributors, and investors. It’s worth examining how Japan successfully combines business activity with government economic policy focused on supporting innovation, the development of new technologies, and exports. A good example of this is the synergy between innovation, entrepreneurship, and export expansion in the development of LNG-based energy.

FSRU Gdansk Project

Forecasts of the energy production structure based on fossil fuels suggest that by 2040, gas carriers will have to deliver LNG to offshore terminals. This action assumes that the expansion of Asian gas markets is a key element. Therefore, there will be no shortage of work for Japanese gas carriers. Polish carriers will also have plenty of work if the European Commission president’s proposal is adopted. Ursula von der Leyen announced on Friday that the proposed 19th package of sanctions against Russia includes a ban on the import of Russian LNG to European markets and the imposition of a ban on transactions with Rosneft and Gazprom Neft.

Based on Japanese innovation and technology, an FSRU terminal will certainly be built in Gdańsk, operated by a Japanese subsidiary of Mitsui O.S.K. Lines. Japanese companies have launched numerous, much larger projects related to the use of LNG in many Asian countries. Reuters recently determined that an even larger project involving Japanese companies may be built in Alaska. The Japanese are considering joining the Alaska LNG project, which is already worth well over USD 40 billion.

Japan has hired consulting firm Wood Mackenzie

to evaluate a planned 800-mile Alaska pipeline and LNG liquefaction plant, according to John Geddie and Tim Kelly of Reuters. This signals that it is considering involvement in the project, which is currently estimated at $44 billion. US President Donald Trump announced the announcement. The project, which has been known for years, is still in the design phase due to costs and logistical challenges related to conditions in Alaska.

While China is investing in green technologies to pursue economic and strategic goals, the Trump administration is perpetuating its dependence on fossil fuels for ideological reasons, observe researchers from the East Asia Forum at Australian National University. They argue that “Japan, once heavily dependent on LNG imports, now faces a mismatch between long-term supply contracts and domestic demand, prompting it to become a global LNG hub.”

By selling excess supply and encouraging the use of gas abroad, particularly in Southeast Asia, Japan risks slowing regional decarbonization, and its foreign investments in gas outweigh its support for renewable energy sources, say researchers from Australia. The country is one of the leading suppliers of LNG to the Pacific Rim.

“The Japanese government is one of the leading public financiers of gas and oil production,” notes Chermaine Lee, a DW correspondent from Hong Kong. Japan is continuing its economic and export-friendly policies, despite pledging to halt all financing for fossil fuels at the 2022 G7 summit.

JAPAN GAS INVESTEMNT ASIE 2024. Source: REURERS

Japan Leads Gas Investment in Asia

Between 2013 and 2024, Japanese public financial institutions allocated $93 billion (€82 billion) to investments in oil and gas projects, according to a report by the South Korean organization Solutions for Our Climate (SFOC). The value of foreign projects developing the industrial use of liquefied natural gas amounted to $56 billion. During the same period, the report estimates that $24.5 billion was allocated to clean energy projects.

“Japan’s international influence on energy financing, and particularly fossil fuel financing, is enormous,” said Walter James, a private consultant specializing in Japanese climate and energy policy, in an interview with DW. He believes Japan has specialized in implementing projects that ensure the implementation of “the entire fossil fuel supply chain… from exploration, production, transportation, to actual use and power plants,” Lee reports.

The Institute for Energy Economics and Financial Analysis (IEEFA) calls this approach the “Japanese model” for LNG investment. For years, Japanese government policy has supported domestic companies in expanding their export business. The “encouraging foreign direct investment in LNG projects” has proven effective, making Japan a key player in the development of LNG installations in the Asia-Pacific region.

The IEEFA report indicates that Japan benefits from this policy in two ways. First, it has better access to LNG supplies for the country’s energy needs. Second, it has better access to “demand centers, allowing Japan to resell surplus LNG.”

“Japan’s resale of LNG in foreign markets has reached record levels, indicating a shift in its role in the global LNG market,” the IEEFA report states, citing Lee. Fossil fuels, oil, coal, and LNG account for over 83% of Japan’s primary energy mix. Gas storage facilities are used not only for the needs of the Japanese economy but also enable its re-export.

 

Alaska LNG Project. Source: Alaska Gasline Development Corporation

 

Gas Route to Alaska

The upcoming Alaska LNG project assumes prices between $8.97 and $12.80 per million British thermal units (MMBtu) in Phase 1, with a long-term goal of reducing domestic energy costs to approximately $2.23/MMBtu upon completion of the entire export project. By comparison, current gas prices in Cook Inlet are around $8.69/MMBtu, and projected costs for imported LNG are $12-15/MMBtu, representing a competitive alternative, according to Alaska Business Magazine.

The scope and cost of the Wood Mackenzie agreement are not publicly disclosed. Should Japan join the project, there is potential for diversification of gas sources in the long term. The information about the exploration of Japanese companies’ participation in the project has been in effect since September 2025. It appeared immediately after the announcement of the signing of an agreement between Japan and the United States regarding customs policy and Japan’s investment in the American economy, particularly in the shipbuilding industry. GospodarkaMorska.pl reported extensively on this here [https://www.gospodarkamorska.pl/japonia-podwoi-potencjal-stoczni-do-2030-r-przyklad-dla-polski-86104]

The Japanese Ministry of Economy, Trade, and Industry declined to comment on the exploration of investments in gas facilities in Alaska. Wood Mackenzie, the developers of the Glenfarne project, and the state-owned Alaska Gasline Development Corporation (AGDC) also did not respond to requests for comment. Since returning to office, Trump has promised to continue the massive project, which aims to transport gas from deposits in remote northern Alaska, then cool it and ship it abroad as liquefied natural gas (LNG).

The need to expand Alaska’s gas production system is evidenced by long-standing agreements with actual customers in the Pacific region. Glenfarne Alaska LNG, LLC announced in the summer of 2025 that PTT Public Company Limited (“PTT”), Thailand’s largest public company, had signed a cooperation agreement for a strategic stake in the Alaska LNG project.

PTT has committed to purchasing 2 million tons of LNG per annum (“MTPA”) from Alaska LNG over a 20-year period. Alaska LNG is a joint venture between 8 Star Alaska, LLC, a subsidiary of Glenfarne Group, LLC, Glenfarne Alaska LNG, LLC (“Glenfarne”). It is the owner and principal developer of Alaska LNG, and Alaska Gasline Development Corporation. PTT is a publicly traded oil and gas company in Thailand with an investment-grade credit rating of BBB+.

Trump’s Gas Policy

During the finalization of the trade agreement with Japan in July of this year, Trump announced that Tokyo and Washington would form a joint venture to develop an LNG project in Alaska. Japan has not confirmed such a plan. However, the final terms of the trade agreement, agreed in September of this year, included a commitment by Tokyo to explore the possibility of signing a new agreement to receive LNG from Alaska. Japan also committed to investing unspecified funds in the US in sectors such as energy and pipeline transportation. These investments are estimated to be worth as much as $550 billion.

Visualization of the Nikiski LNG terminal. Source: Alaska Gasline Development Corporation

“We are continuing close discussions with US officials regarding the economic feasibility, production start forecast, and form of cooperation to implement the investment in a way that benefits both Japan and the United States,” Japanese Trade Minister Yoji Muto said at a press conference in late July when asked about the Alaska LNG project, according to Reuters.

Energy flexibility and security concerns mean Japan wants to remain a significant player in the LNG market, but it is seeking outlets for surpluses, in line with the government’s strategy to maintain volumes at 100 million tons by increasing gas demand in Asia. This policy will increase the frequency of gas carrier services between Japan and LNG terminals in Alaska and other Asian countries.

The Alaska LNG project is a large-scale investment aimed at constructing a well field, transmission systems, and the liquefaction and export of natural gas from the northern Alaska region. The project also aims to ensure a stable, long-term supply of low-cost gas for local needs in Alaska.

The intended recipients are industry and households. The project includes an 800-mile pipeline, compressor stations, and a liquefaction plant in Nikiski, in south-central Alaska. Glenfarne is currently the lead developer, working to secure strategic partners and make a final investment decision for this multi-billion dollar project, according to the Alaska Gasline Development Corporation.

LNG Usage in Japan by 2030. Source: IEEFA

Japan’s Gas Policy

This year, Tokyo Gas announced it was investigating a 1.5-gigawatt LNG project in Vietnam and acquired a stake in an LNG regasification terminal in the Philippines. Marubeni and Sojitz have commissioned a 1.8-gigawatt LNG-fired power plant in Indonesia. Japan, represented by JERA, Tokyo Gas, Osaka Gas, and Kansai Electric Power, is a stakeholder, supplier, or participant in studies of over 30 projects involving the use of gas for energy purposes, according to information from the Institute for Economic and Financial Analysis of Energy (IEEFA) and Reuters.

 Japan’s Energy Resource Mix. Source: Wood MacKenzie, Reuters

Several projects are under development in Bangladesh, India, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Taiwan, Thailand, and Vietnam. “Japanese LNG demand is uncertain, but the government wants to ensure stable supplies in the long term,” said Yoko Nobuoka, senior analyst for Japan energy research at LSEG, as quoted by Chermaine Lee.

Yoko Nobuoka argues that “Developing domestic trading opportunities and creating a pan-Asian gas market would help enhance energy security and hedge against the risk of an LNG surplus.” Japan increased LNG imports after the 2011 Fukushima nuclear disaster, which led to the shutdown of all its nuclear reactors.

 Alaska LNG Project. Source: Alaska Gasline Development Corporation

Tokyo has increased its participation in global LNG projects to secure the country’s energy supplies and ensure its energy security. In 2020, Japan’s Ministry of Industry adopted a plan to maintain LNG transshipment capacity at marine terminals at 100 million tons per year by 2030.

Plans for energy production based on fossil fuels are still in motion. Despite the development of renewable energy, it can be assumed that LNG carriers will continue to operate on sea routes and deliver gas to marine terminals for a long time to come.