Trump wants South Korea in on Alaska LNG. Here's why Seoul is cautious

• Alaska LNG would reduce shipping time to South Korea from 20-30 days (Gulf Coast route) to 7-9 days, but experts say the massive pipeline construction costs could make it more expensive than alternatives from Australia, Qatar, or the U.S. Gulf Coast
• South Korea faces risks of cost overruns and 20-year take-or-pay contracts while domestic gas demand is declining, making buyers selective about long-term LNG commitments
• South Korean involvement remains preliminary with only a non-binding agreement from POSCO International for 1 million metric tons annually; broader participation may require U.S. government support, tax incentives, and opportunities beyond just purchasing LNG

Summary

President Trump announced South Korea's involvement in Alaska's $50 billion LNG project as part of a broader $200 billion U.S. investment package. However, South Korean President Lee Jae Myung expressed reservations, insisting participation depends on financial viability and legal compliance.

Project Overview:

The Alaska LNG initiative would transport natural gas through an 800-mile pipeline from Prudhoe Bay to Nikiski, with annual capacity of 20 million metric tons. Total estimated costs range between $44.5 billion and $54.5 billion.

Key Advantages:

• Shipping time from Alaska to South Korea: 7-9 days versus 20-30 days from U.S. Gulf Coast
• Avoids geopolitical chokepoints like the Strait of Hormuz
• Significantly reduced transportation costs

South Korean Concerns:

• Cost Competitiveness: Experts note LNG from Australia, U.S. Gulf Coast, and Qatar would be cheaper. The project's capital expenditure could fund three Gulf Coast projects.
• Demand Uncertainty: South Korea's declining gas demand makes 20+ year take-or-pay contracts risky
• Cost Overruns: Challenging terrain and lengthy construction timeline pose significant financial risks

Current Status:

POSCO International has a non-binding agreement for 1 million metric tons annually for 20 years, plus potential steel supply for the pipeline. This remains separate from any government commitment.

Requirements for Progress:

South Korea seeks greater certainty on project financing, U.S. government support (tax incentives, financial assistance), and opportunities for Korean companies beyond LNG purchasing—including construction, engineering, and equipment supply contracts. The critical factor remains achieving competitive landed LNG costs after accounting for all expenses.