Korean officials continue to push back after President Trump announced late last month that South Korea would invest more than $50 billion in an Alaska gas pipeline.
At a lunch with state lawmakers in Anchorage on Wednesday, Korean officials indicated that any potential investment would come after developer Glenfarne reaches what’s known as final investment decision, an official green light for the project, said Democratic state Sen. Bill Wielechowski.
“They said after the final investment decision is made, then they'll consider investing in the project if it's commercially reasonable,” Wielechowski said in an interview. “It was very clear that there's just zero decision made by the Republic of Korea to invest in this project at this point.”
The Korean consulate in Anchorage did not respond to a request for comment.
Korean officials quickly clarified after Trump’s Sept. 30 Oval Office announcement that the country had not agreed to invest — only to start working together towards a possible future investment.
Trump insisted last week he “didn’t jump the gun” in announcing the investment and that if South Korea wouldn’t invest in Alaska LNG, he’d “just charge them more.”
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“This is part of the challenge that allies have of dealing with the Trump administration: a lot of the details of any particular agreement are not ironed out far in advance,” said Victor Cha, president of geopolitics and foreign policy and Korea chair at the Center for Strategic and International Studies in Washington.
Even so, Cha said he expected South Korea would follow through and invest in the project.
“The general contours of this agreement are very clear, and (natural gas) is something that the South Koreans need, so I think the details will be worked out in due course,” Cha said.
Iran War buoys Alaska LNG’s strategic value
Korean officials have consistently said any potential investment must be commercially reasonable — better, for instance, than investing in U.S. government bonds.
That has proven a challenging bar for Alaska LNG to meet.
For decades, Alaska state officials have pursued the 807-mile pipeline, which they say would boost the state treasury and provide Alaskans with low-cost energy. But efforts to date have failed to secure firm commitments from gas buyers at prices that would support the project’s immense cost.
At the same time, the Iran War’s disruption of natural gas shipping from the Middle East to Asia has made the Alaska project more appealing, trade minister Kim told the National Assembly panel.
“After the Middle East war, there is clearly a part where new strategic value has emerged,” Kim told the committee, according to a report by Korean outlet ChosunBiz.
The Iran War and Korea’s desire to preserve a good relationship with the U.S. may lead the country to take more risk and pay more than it otherwise would by investing in Alaska LNG, said Cha, with the Center for Strategic and International Studies.
“This is a longer-term investment in energy security, and it's a long-term investment in the alliance relationship with the United States,” Cha said.
U.S. Gulf Coast and Canadian LNG projects are cheaper
The Alaska project is far from the only option for customers for U.S. allies seeking gas from friendly shores. Alaska LNG could cost roughly twice as much per unit of gas as comparable sources on the U.S. Gulf Coast, Reuters reported.
It’s also more expensive than a project on British Columbia’s Pacific coast, LNG Canada, in which Korean state-owned gas company KOGAS already holds a 5% stake. Shell, the project’s lead developer, said one day before Trump’s announcement that it would double the project’s capacity to 28 million metric tons of LNG per year.
“The question that you have to ask is what people are willing to pay for that kind of advantage,” said Jason Feer, head of global business intelligence for the energy consulting firm Poten & Partners.
LNG Canada would produce roughly 40% more gas than Alaska LNG for roughly the same price.
Price matters — at least, so far
And despite the war-driven disruption, customers to date haven’t been willing to pay more for Alaska’s gas, Feer said. Customers across Asia have signed nonbinding letters of intent to buy gas from Alaska LNG, but they have not inked firm agreements to buy gas at a particular price.
“So far, we haven't seen buyers willing to sign contracts that indicate that they're willing to pay substantially above market for LNG from Alaska,” he said.
And that means there’s still a long road ahead before any pipe can be laid, Feer said.
“The project has a lot of work to do before you get across the finish line,” Feer said. “It doesn't seem to me that it's imminent in any sense.”
At a stop in Anchorage Monday, Vice President J.D. Vance seemed to acknowledge the more than $50 billion investment was not a done deal. But he insisted the Trump administration would ensure the investment moved forward.
“I think you have some political dynamics, frankly, in South Korea, but we’re going to get this done,” Vance told Alaska’s News Source. “Whether the current government or the next government in South Korea, or frankly, whether we have to work with the Japanese and other nations.”
