A high-stakes race for liquefied natural gas (LNG) markets is unfolding between Canada and the United States, as both nations seek to secure buyers in Asia while facing the looming threat of Russian gas returning to global markets.
In a bid to accelerate Alaska’s long-stalled LNG project, US president Donald Trump on Tuesday dispatched a delegation to South Korea to rally investment and buyers for a USD$44 billion pipeline to nowhere — just as Canada begins filling its own LNG Canada terminal in Kitimat, British Columbia, with natural gas.
Alaska Governor Mike Dunleavy, accompanied by state energy officials and executives from the Glanfarne Group, visited South Korea this week to push the $44-billion LNG pipeline that would transport gas from Alaska’s North Slope more than 1,300 kilometres south, where it would be liquefied and shipped to markets in Asia.
It comes barely a week after Alberta Premier Danielle Smith inked solid commitments from Japan for her own Canadian output.
Trump has been touting the Alaska project as a cornerstone of his push for American energy “dominance” emphasizing its potential to supply allies like Japan, South Korea, and Taiwan. However, the economics of the massive pipeline remain uncertain with cheaper LNG projects already coming online worldwide, particularly in Qatar and Australia.
Not to mention Kitimat.
Despite Trump’s unabashed — some say, unfounded — enthusiasm, key details about financing and concrete commitments from buyers remain scarce.
While South Korea has expressed interest, ostensibly to avoid its own tariffs, no formal agreements have been announced and potential partners may be deterred by competition from established and emerging suppliers.
Trump is expecting “trillions” from both Korea and Japan in return, or more than the combined GPD of both countries. He is sure to be sorely disappointed.
Meanwhile, Canada has quietly surged ahead in the LNG race — or at least, pulled even as the US seeks to regain the gas export crown after former president Biden’s pause on new terminals in the Gulf of Mexico. In any event, it has to traverse the Panama Canal to get to Korea which presents a distinct competitive disadvantage.
The first phase of the LNG Canada project, located in Kitimat, BC, is nearing completion and will begin filling its tanks with natural gas in preparation for its first exports later this year. The CAD$40-billion project, backed by major energy players including Shell, Petronas, and Mitsubishi, is set to become Canada’s first large-scale LNG export terminal later this spring.
Unlike Alaska LNG, which faces an uphill battle in securing buyers, LNG Canada has already locked in long-term contracts with Asian customers. The project’s strategic Pacific coast location offers a shipping advantage over US Gulf Coast terminals in Louisiana and texas, allowing for shorter delivery times to key markets in Japan, China, and South Korea.
Yet, despite its progress, Canada’s LNG sector has found itself in Trump’s crosshairs.
In a move that could further strain US-Canada energy relations, Trump’s proposed tariffs on Canadian oil and gas exports include duties on natural gas and refined petroleum products that are seen as an attempt to protect US energy producers from Canadian competition — particularly as Canada ramps up its LNG exports.
While the US and Canada duke it out for Asian LNG customers, another wildcard looms on the horizon: the potential return of Russia to global markets.
Since Russia’s invasion of Ukraine in 2022, Western sanctions have severely restricted its energy exports. However, diplomatic shifts suggest that sanctions relief on Russian LNG could be on the table as part of ongoing negotiations over a possible Ukraine peace deal.
Reports suggest that the US and EU are weighing the possibility of easing restrictions on Russia’s Arctic LNG 2 project, which has been sidelined for two years since its unprovoked aggression.
Additionally, discussions about reviving the Nord Stream 2 pipeline — damaged and left inoperative after the war began — are reportedly gaining traction in Europe, signalling a potential thaw in energy relations.
If Moscow is allowed back into the LNG market, it could undercut both US.and Canadian LNG projects by offering cheaper gas to price-sensitive buyers in Asia and Europe.
For now, the race is on. Canada’s head start in LNG exports could give it a competitive edge, but Trump’s aggressive push to secure Asian buyers may yet breathe life into Alaska’s pipeline dreams.
The ultimate winners will be determined not just by geopolitics and tariffs, but by which country can deliver reliable, cost-effective gas to an energy-hungry world.
Despite assertaitions by Canadian officials such as former prime minister Justin Trudeau, every one else seems to think there’s a business case.