▲ Minister of Trade, Industry and Energy Kim Jeong-kwan (right) meeting with the U.S. Secretary of Commerce
The U.S. government is reportedly strongly demanding South Korea's participation in the Alaska liquefied natural gas (LNG) project as part of its investment projects in the United States.
While the South Korean government maintains its stance that no specific projects have been finalized, strong pressure from the U.S. suggests that upcoming negotiations will not be easy.
According to the National Assembly and government authorities on Tuesday (Sept. 9), the Ministry of Trade, Industry and Energy (MOTIE) recently brought up the possibility of participating in the Alaska LNG project during a closed-door briefing to the National Assembly on the progress of follow-up negotiations for South Korea-U.S. strategic investments.
An official from the National Assembly's Strategy and Finance Committee said, "The intent was that it has not yet been decided whether or not to pursue the Alaska project, and that it could change depending on the negotiation results," adding, "Our original stance was to follow the feasibility study results due to a lack of profitability, but because the U.S. is pushing so hard, it is difficult to just keep saying that."
The Alaska project is one of U.S. President Donald Trump's core national tasks. It involves extracting natural gas from Alaska's North Slope, transporting it via a pipeline of about 1,300 kilometers to an area near Anchorage, liquefying it, and supplying it to consumer markets.
To date, prevailing assessments indicate that securing profitability for this project remains opaque, making it difficult to guarantee commercial rationality.
Minister of Trade, Industry and Energy Kim Jeong-kwan also expressed hesitation at the National Assembly in November of last year, calling the project a "high-risk venture."
However, President Trump has repeatedly raised the possibility of South Korean and Japanese investment funds being poured into the project.
Last year, South Korea pledged a total of 350 billion dollars in investments in the U.S., including 150 billion dollars in the shipbuilding sector and 200 billion dollars in strategic investments, in exchange for lowering tariffs from 25% to 15%.
The government is known to have effectively selected the construction of the Encinal combined-cycle gas turbine power plant in Texas as its first investment project, and the construction of large-scale nuclear power plants as its second project.
Given that the Encinal power plant could cost 22. billion dollars and building eight large-scale nuclear reactors could exceed 120 billion dollars, concerns have been raised that adding the Alaska project would exceed the 200 billion dollar ceiling for strategic investment funds.
The South Korean government is reportedly engaged in last-minute negotiations to ensure the actual execution scale does not exceed the limits of the U.S. investment fund.
U.S. investment projects are gradually moving into the execution phase.
The government is reportedly set to announce the U.S. investment projects on the 18th.
In this case, the possibility has been raised that the first investment tranche, estimated at around 2 billion dollars, could be wired to the U.S. around the end of this month.
A Strategy and Finance Committee official said, "I do not recall the ruling party and the government reporting a specific date for the wire transfer," adding, "What the U.S. is demanding is a quick announcement," describing the atmosphere.
The Ministry of Trade, Industry and Energy explained, "Regarding investments in the U.S., specific investment destinations, announcement timings, and the scale and timing of the first investment remittance have not been finalized."
Regarding the investment scale, the ministry stated, "Under the strategic investment memorandum of understanding (MOU), U.S. investments will under no circumstances exceed a total of 200 billion dollars, and the annual remittance limit will not exceed 20 billion dollars."
(Photo provided by the Ministry of Trade, Industry and Energy, Yonhap News)
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