Japan and Big Oil Backed Away... What is the Commercial Viability of 'Project North'?

[Anchor]

The Alaska LNG project, which U.S. President Trump has definitively locked in, is an initiative that major global oil companies previously entered and later withdrew from. This is because, while it requires astronomical costs, question marks remain over its profitability.

Reporter Kwon Ran examines whether there is actual practical benefit for us to jump into it now.

[Reporter]

The Alaska LNG project, named "Project North" by South Korea and the United States.

It is a project to bring natural gas from northern gas fields through a 1,300-kilometer pipeline to the southern coast, liquefy it, and export it to South Korea, Japan, and other countries.

It is a mega-scale project estimated to cost between 60 trillion and 74 trillion won in total, with a target production of 20 million tons annually.

Compared to LNG terminals along the U.S. Gulf Coast, the transportation distance to major East Asian consumer nations is shorter, which can significantly cut down time and costs.

However, the Alaska LNG development has drifted for a long time due to massive construction costs, poor construction conditions caused by extreme weather, and controversies over profitability.

Back in 2014, global oil giants such as ExxonMobil, ConocoPhillips, and BP jumped in, making it seem like it would take off in earnest, but they ultimately withdrew citing project costs and economic feasibility.

Later, upon returning to the White House, U.S. President Trump re-pushed the project and has pressured South Korea and Japan, which announced plans for investment in the U.S., by singling them out for participation.

Japan considered a plan to invest 44 billion dollars in the Alaska project last year, but did not include it in its actual investment projects in the U.S.

The South Korean government's limitation of its involvement to initiating a review also took into account the pile of tasks ahead, such as project costs potentially increasing much more than expected and the need to find more buyers for the LNG.

Regarding President Trump's unilateral claim that investment has been finalized, the government drew a line, stating, "Nothing has been decided regarding whether to invest."

[Voice / Kim Jeong-gwan, Minister of Trade, Industry and Energy: I would like to mention that we expressed regret to U.S. Commerce Secretary Lutnick regarding the matter going beyond what was agreed upon.]

However, as the U.S. government shows strong commitment to the Alaska LNG project, room remains for its commercial viability to improve.

[Interview / Yu Seunghun, Professor, Department of Future Energy Convergence, Seoul National University: There is no commercial viability right now. If we negotiate well with the U.S. to reduce various tariffs and taxes while receiving support from the U.S. government, we can secure commercial viability.]

As massive costs and variables such as changes in the U.S. administration are scattered throughout, the government repeatedly emphasized that it will pursue the project only if commercial rationality is verified.

Reported by Park Ji-in | Graphics by Cho Su-in
※ Please note: This article was translated by AI and may contain errors.