South Korea has pushed back on the Trump administration’s announcement that the country would invest $54 billion in a LNG project in Alaska
South Korea has pushed back on the Trump administration’s announcement that the country would invest $54 billion in a liquefied natural gas project in Alaska, saying it had agreed to do so only if the long-stalled venture proves economically feasible.
“What the Korean government agreed with the US is that the Alaska project will proceed only if it is commercially viable,” Industry Minister Kim Jung-kwan said in a televised briefing on Thursday. Seoul had expressed its regret to US Commerce Secretary Howard Lutnick “that what was reported today went beyond what had been agreed,” he said.
President Donald Trump had earlier said Korea would invest in the Alaska project at a White House event on Wednesday. It was part of a pledge by Seoul to invest $200 billion in American energy projects following last year’s US-South Korea trade deal.
The Alaska LNG venture has struggled for decades to secure the binding long-term contracts and investments needed for it to move forward. The project is massive in scale, requiring the construction of an 800-mile (1,287 kilometer) pipeline across the state. Alaska LNG has, however, signed non-binding sales agreements with companies in countries including South Korea, Japan and Taiwan.
Kim said Seoul’s agreement on Alaska LNG was limited to provisions contained in a joint fact sheet. The project would proceed subject to commercial viability requirements under the investment deal between the two nations and South Korean domestic legal procedures, while the US would take steps to improve its economic prospects, he said.
If South Korea does participate in the project, the US has agreed to offer it LNG at favorable prices, Kim said.
Under the broader investment agreement, South Korea has insisted that projects meet a commercial viability test before funds are deployed. The test was a central issue in negotiations over how Seoul’s $350 billion US investment pledge would operate. As well as investing in the American energy sector, Seoul agreed to put $150 billion into US shipbuilding.