Japan Pulled Out, Energy Giants Walked Away... Does the Alaska LNG Project Make Commercial Sense?

[Anchor]

The Alaska LNG project, which the United States unilaterally announced as having a confirmed investment from South Korea, is a venture that global oil companies previously abandoned due to poor commercial viability.

Therefore, a critical factor will be how much the U.S. government can enhance this economic feasibility through administrative support. Kwon Ran breaks down the key issues that need to be examined.

[Reporter]

Named "Project North" by South Korea and the U.S., the Alaska LNG initiative involves extracting natural gas from a northern gas field, transporting it 1,300 kilometers via pipeline to the southern coast for liquefaction, and then exporting it to countries like South Korea and Japan.

Estimated at a massive 60 trillion to 74 trillion won in total project costs, the mega-scale venture aims to produce 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 reduce both time and costs.

However, the Alaska LNG development has drifted for a long time due to astronomical construction costs, harsh operating conditions caused by extreme weather, and debates over profitability.

In 2014, global oil majors such as ExxonMobil, ConocoPhillips, and BP jumped in, making it look like the project would take off, but they ultimately withdrew citing project costs and economic feasibility.

After returning to the White House, U.S. President Trump re-pushed the project and has pressured South Korea and Japan, which announced investment plans targeting the U.S., to participate.

Last year, Japan considered investing 44 billion dollars in the Alaska project, but ultimately did not include it in its actual investment plans targeting the U.S.

The South Korean government has limited its current stance to reviewing the matter, taking into account various pending challenges, such as construction costs potentially surging far beyond expectations and the need to secure additional LNG buyers.

Drawing a line against President Trump's unilateral announcement that investment has been confirmed, the government stated, "Nothing has been decided regarding whether to invest."

[Kim Jeong-gwan / Minister of Trade, Industry and Energy: I want to mention that we expressed regret to Commerce Secretary Lutnick over statements that went beyond what was agreed upon.]

Still, room remains for the project's commercial viability to improve as the U.S. government shows strong determination toward the Alaska LNG initiative.

[Yoo Seung-hoon / Professor, Department of Future Energy Convergence, Seoul National University of Science and Technology: Right now, there is no commercial viability. 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 variables ranging from astronomical costs to changes in the U.S. administration remain scattered, the government repeatedly emphasized that it will pursue the project only if commercial rationality is confirmed.

(Video editing: Park Ji-in, Design: Cho Su-in)
※ Please note: This article was translated by AI and may contain errors.