South Korean Government Tells Alaska State Legislator: "LNG Investment Requires Commercial Viability"

Interview with Democratic Alaska State Senator
Alaska Project Faces Profitability and Buyer Shortfalls
Trump Administration Ramps Up Pressure on South Korea

U.S. President Donald Trump announced last month that South Korea had agreed to invest more than $50 billion (about KRW 68 trillion) in an Alaska liquefied natural gas (LNG) project. However, an Alaska state lawmaker said the South Korean government had reiterated that it would not finalize an investment decision until the project’s “commercial viability” was confirmed.

U.S. President Donald Trump announces South Korean investment projects in the United States in the Oval Office at the White House on the 30th of last month (local time), with U.S. Commerce Secretary Howard Lutnick (third from left) in attendance. Trump said South Korea would invest about $54 billion in an Alaska liquefied natural gas (LNG) project. AFP-Yonhap News Agency

According to Alaska Public Media, a local Alaska outlet, Alaska State Senator Bill Wielechowski, a Democrat, said on October 11 (local time), “They told us that after a final investment decision is made, [South Korea] will review whether the investment project is commercially viable,” adding, “It is clear that no South Korean investment decision on this project has been made at this point.”

Wielechowski said South Korean officials had lunch with state lawmakers in Anchorage, Alaska, on October 7 and conveyed that South Korea could invest only after Glenfarne Group, the lead developer of the Alaska LNG project, makes a final investment decision (FID).

The outlet noted that the Alaska project, which includes a plan to build a 1,300-kilometer gas pipeline in the state, is unlikely to meet the South Korean government’s requirement of “commercial viability.” The Alaska LNG project could cost twice as much as LNG projects producing gas in the U.S. Gulf of Mexico. Meanwhile, an LNG project planned for the Pacific coast of British Columbia, Canada, could produce about 40% more natural gas at a similar cost. Korea Gas Corporation is participating in the project as an investor with a 5% stake.

Glenfarne has yet to secure enough potential buyers to finalize an FID. The United States has secured agreements to supply 13 million metric tons of LNG to South Korea, Japan, Taiwan, Thailand and France’s TotalEnergies. However, that is not enough to move the project forward. The countries that agreed to the supply arrangements are also reported to have signed nonbinding letters of intent rather than firm contracts to buy gas at a specific price.

Jason Pire of energy consultancy Poten & Partners said, “Even with energy transportation disrupted by the war in Iran, buyers are not showing a willingness to pay more for Alaskan LNG,” adding, “There is still a lot to do before the project reaches the final stage, so it is difficult to say that it is imminent.”

On September 30, President Trump announced South Korean investment projects in the United States at the White House, saying South Korea would invest about $54 billion in the Alaska LNG project. However, a fact sheet released by the U.S. Department of Commerce that same day said only that “the United States and the Republic of Korea have agreed to begin cooperation on the Alaska LNG project, subject to the project’s commercial viability and all relevant domestic legal requirements under the Strategic Investment Memorandum of Understanding (MOU).” Immediately after the White House announcement, the South Korean government drew a line, saying it would review the investment in a way that served the national interest, based on the criteria of commercial viability and strategic value.

Amid the differing positions between the United States and South Korea, the Trump Administration is stepping up pressure. On October 2, President Trump warned that he would impose higher costs if South Korea did not participate. U.S. Vice President J.D. Vance also escalated the pressure in an interview with an Alaska broadcaster on October 6, referring even to “South Korea’s political dynamics.” “We’re going to get this project done, whether it’s with the current government in South Korea, the next government, or, frankly, whether we have to work with Japan or another country,” he said.

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