Last-Minute Tensions Over US Investment MOU: Disagreements on Alaska LNG Viability and Nuclear Equity Investments

Report to National Assembly Postponed; MOU Signing Around September 18 Also Likely to Be Delayed
Disagreement Over Commercial Viability of Alaska LNG; Negotiations Continue Over Westinghouse Stake and Board Participation
Government “$200 Billion Total, $20 Billion Annual Cap to Be Maintained”; Criteria for Assessing Profitability Also Under Debate

Kim Jung-kwan, Minister of Trade, Industry and Energy, who visited the United States to finalize investment negotiations, is seen arriving at Incheon International Airport Terminal 2 on September 13, listening to questions from the press. 2026.9.13 Yonhap News Agency.

With the postponement of the National Assembly report on the government’s first $350 billion US investment project, which the government has been promoting, the likelihood has increased that the signing of a memorandum of understanding (MOU) between Korea and the United States will also be delayed. It is known that the two countries are engaged in last-minute coordination on several issues, including the commercial viability of the Alaska liquefied natural gas (LNG) project, the terms of the investment in US nuclear company Westinghouse, and the business participation conditions for Korean companies.

According to the Ministry of Trade, Industry and Energy and the National Assembly on September 16, the ministry requested that the previously scheduled classified report to the National Assembly's Trade, Industry, Energy, Small and Medium Venture Business Committee and the Strategy and Finance Committee—originally set for September 17—be postponed. The government had planned to announce the first investment project after the National Assembly’s report and sign the MOU with the United States around September 18. While the ministry did not specify the reasons for the delay, sources inside and outside the government believe it is because negotiations between the two countries over specific conditions of the first investment project are still underway. In fact, upon returning from the United States recently, Minister of Trade, Industry and Energy Kim Jungkwan stated, “We have reached near agreement on many issues, but there are still unresolved points until the final signature is completed.”

Alaska LNG: 'Investment' or 'Consideration'

One of the most significant issues is the Alaska LNG project. The United States is reported to have requested Korea’s participation in the Alaska LNG project as part of Korea’s US investment initiatives. However, the project requires massive initial investment and the construction of long-distance pipelines and liquefaction facilities, making commercial viability a critical factor. The Korean government has previously expressed concerns about the project’s profitability. As a result, the two countries have reportedly discussed adjusting the wording so that even if Alaska LNG is included in the MOU, it would focus on considering or exploring future investment potential, rather than committing to investment at this stage.

How to determine the ‘commercial viability’ of US investments is also a variable. Recently, some media outlets reported that assuming a $20 billion investment project would recoup principal and an annual interest of about 5% over 20 years, an average annual internal rate of return (IRR) of 16.68% would be necessary. However, the Ministry of Trade, Industry and Energy argued that IRR is not the criterion for assessing the commercial viability of strategic US investments. The government stated that the criteria are the agreed interest rate between the two countries and whether principal and interest can be recovered during the project period, and that IRR may vary depending on cash flow structure and interest rates. The core issue for US investments is not simply ‘what percentage return can be achieved,’ but whether the project structure allows Korea to recover its principal and interest even if Korean investment is put into projects requested by the US.

Westinghouse Stake: 'What Percent, What Rights' Are in Focus

The investment structure around the US nuclear power business is also a sticking point in the final negotiations. The Korean side has been considering securing a stake in Westinghouse to expand the participation of Korean companies in the US nuclear power market. Some media reported that Korea is seeking a stake of around 15% and a seat on the board of directors, while the US prefers a lower equity investment. However, in an explanatory material on September 15, the Ministry of Trade, Industry and Energy clarified that details such as the Westinghouse stake and other nuclear project specifics have not yet been determined.

The size of the stake is important because of the rights and scope of business participation it would bring after the investment—not just the investment itself. The rationale is that if Korea secures a certain percentage of shares and participates in management decisions, it could expand opportunities for Korean companies to participate in construction, equipment supply, and services in US nuclear projects. On the other hand, if the US prefers Korea’s investment to be a passive financial stake, the range of business participation expected by Korea could differ from the American plan.

On March 12, during the plenary session of the March extraordinary National Assembly held at the National Assembly, the Special Act for Strategic Investment Management between Korea and the United States (Special Act on Investments to the United States) was passed. 2026.3.12 Photo by Hyunmin Kim

"$200 Billion and $20 Billion Per Year Cap Will Be Observed"

The government has also made it clear that it will not expand the overall scale of investments into the US. Minister Kim stated that the size of strategic investments demanded by the US will not exceed the previously agreed $200 billion, and the annual cap of $20 billion will be observed. Under last year’s agreement between Korea and the US, Korea planned to invest a total of $350 billion, including $150 billion in shipbuilding and $200 billion in strategic investments.

Of these, the government set the annual execution limit for strategic investments at $20 billion. The procedure involves the review of the Korea-US Strategic Investment Project Management Committee, chaired by the Minister of Trade, Industry and Energy, and deliberation and resolution by the Korea-US Strategic Investment Operations Committee, chaired by the Minister of Strategy and Finance, before reporting to the National Assembly. With the National Assembly’s report postponed, the originally anticipated date of the MOU signing around September 18 is now also likely to be delayed.

This content was produced with the assistance of AI translation services.