U.S., JAPAN ENERGY INVESTMENT $550 BLN

S&P GLOBAL - October 28, 2025 - US President Donald Trump and Japanese Prime Minister Sanae Takaichi signed a comprehensive trade and investment agreement Oct. 28 in Tokyo to implement previous commitments, including Japan's pledged $550 billion investment in US sectors such as energy infrastructure, LNG, advanced fuels, grid modernization, critical minerals mining, processing and refining.

The agreement, signed during a signing ceremony, formalizes the implementation of an earlier tariff agreement reached July 22 and strategic investments announced Sept. 4.

"The two leaders noted with satisfaction swift and continued efforts by both countries, and confirmed their strong commitment to implementing this GREAT DEAL," the agreement stated. "The Agreement will help both countries to strengthen economic security, promote economic growth, and thereby continuously lead to global prosperity."

As part of the strategic investments, Tokyo has agreed to invest $550 billion in US sectors, including energy infrastructure and production, LNG, advanced fuels, grid modernization, critical minerals mining, processing and refining, and commercial and defense shipbuilding, including new yards and modernization of existing facilities. It will also target pharmaceuticals, medical production and semiconductors.

US Secretary of Commerce Howard Lutnick, in an Oct. 27 interview with the Nikkei, said the $550 billion investment framework would prioritize "power, pipelines ... things that are fundamental to national security and have virtually no risk."

Lutnick, who chairs the "investment committee" responsible for selecting eligible projects under the investment framework established in July, said that 10 to 12 Japanese companies involved in sectors such as power supply and shipbuilding are preparing to explore US investment opportunities, with the first project expected to be identified by year-end.

Japanese companies would provide gas turbines, transformers and cooling systems to help expand US generation capacity as data centers push demand higher, Lutnick said.

He said Japan's $550 billion package is a joint investment in the economic security of the two countries, and more than half of the investment may be directed toward electricity and energy development.

Listed investments

A fact sheet released Oct. 28 by the Japanese government showed that up to $327 billion could be earmarked for investment in the energy sector based on interest from Japanese and US companies.

Nuclear investments account for the largest share in the energy sector, with up to $100 billion for projects developed by Westinghouse for the construction of AP1000 nuclear reactors and small modular reactors, with the participation of Japanese companies such as Mitsubishi Heavy Industries, Toshiba Group and IHI. The package also includes $100 billion for SMRs to be constructed in collaboration with GE Vernova and Hitachi.

Other energy projects include Bechtel's project management, engineering, procurement and construction services for large-scale power and industrial infrastructure like power plants, substations and transmission systems that support reliable energy delivery for mission-critical facilities involving Japanese companies for up to $25 billion.

Kiewit will provide engineering, procurement and construction services for up to $25 billion. And GE Vernova, together with Japanese companies, will supply large-scale power equipment such as gas turbines, steam turbines and generators to grid electrification and stabilization systems, including high-voltage direct current and substation products for mission-critical facilities, for up to $25 billion.

SoftBank Group will provide engineering and develop the specification, design, procurement, assembly, integration, operations and maintenance for the building of large-scale power infrastructure for up to $25 billion.

Toshiba will supply electric power modules, transformers and other power generation substation equipment, for up to $25 billion.

Carrier will supply thermal cooling systems and solutions, including chillers, air handling systems and coolant distribution units essential for power infrastructure, with Japanese companies' involvement, for up to $20 billion.

Kinder Morgan will provide natural gas transmission and other power infrastructure services, with Japanese companies' involvement, for up to $7 billion.

Other designated areas of investment cover the development of power sources for AI as well as enhancing AI infrastructure and critical minerals among other areas.

This includes Falcon Copper's construction of a copper smelting and refining facility located in the western US, involving Japanese suppliers and offtakers for $2 billion, Carbon Holdings' construction of a greenfield ammonia and urea fertilizer facility, involving Japanese suppliers and offtakers for up to $3 billion.

Max Energy's project to complete the shipping routes in southern US, including dredging and widening, to accommodate 100,000-ton crude oil ships and facilitate the export of US crude oil, with Japanese suppliers and offtakers for $600 million.

Trump, during an Oct. 28 dinner in Japan with business leaders, said his policies are helping build out US infrastructure.

"One of the things I did that's really helping AI, because of the massive amount of electricity they need, is I said, you build your own power plant, if you'd like."

Trump also touted his administration's regulatory cuts and rapid project approvals as supporting the buildout of US energy infrastructure.

"This includes the upcoming liquefied natural gas pipeline in Alaska, which we have well underway to export vast amounts of American energy," Trump said, "And Japan is one of the big customers, by the way."

Alaska LNG

In the Nikkei interview, Lutnick went on to suggest that a LNG development project in Alaska could qualify. "It's a giant project, and who gets to take the offtake? Of course, Japan," he said.

Alaska LNG consists of a 42-inch-diameter pipeline to transport natural gas from Alaska's North Slope to meet domestic needs and produce 20 million mt/year of LNG for export.

Despite challenges such as its $44 billion estimated cost and difficulty securing customers, Alaska LNG remains a priority for the Trump administration, which has sought external support for the project in trade talks with Japan and other countries.

Glenfarne Alaska LNG and Tokyo Gas announced on Oct. 24 the signing of a letter of intent for the offtake of 1 million metric ton/year of LNG from the Alaska LNG project, following the signing of another letter of intent by JERA, a 50-50 joint venture between TEPCO Fuel & Power and Chubu Electric, for the offtake of 1 million mt/year of Alaska LNG in September.

Tokyo Gas was the first Japanese buyer to import LNG from Alaska's Kenai, alongside Tokyo Electric Power Co., in 1969.

The White House said July 23 that the US and Japan are "exploring a new offtake agreement" for Alaskan LNG under the July 22 bilateral strategic trade and investment agreement.

"There is no doubt that Alaska LNG is a very large project," Minister of Economy, Trade and Industry Ryosei Akazawa, who previously led Japan's tariff negotiations with the US as the minister in charge of economic revitalization, said Oct. 22.

"When speaking with their secretaries, for example, they say this is important for economic security, so it will be carried out under American responsibility," he said, adding, "They will secure all necessary funding, so Japan is actually in a position to receive offtake agreements and avoid any difficulties."

"This is not something where we can dictate what to do within the US, so it will depend on how the US consolidates its thinking," he added. "While we will also contribute ideas, I believe that how the Alaska LNG project is ultimately shaped will be decided in the future."

Critical minerals

During the Oct. 28 signing ceremony, Trump and Takaichi also signed a US-Japan framework for Securing the Supply of Critical Minerals and Rare Earths through Mining and Processing, under which both countries aim to enhance supply chains for advanced technologies through coordinated investments and economic policy tools.

Initiatives include leveraging financial support mechanisms, promoting dialogue among companies, and identifying projects to address supply chain gaps. The two countries will also establish a US-Japan Critical Minerals Supply Security Rapid Response Group to address supply vulnerabilities and consider a mutually complementary stockpiling arrangement, utilizing existing national systems in line with each country's regulations.

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