President Trump announced Wednesday that South Korea will invest $200 billion in US projects, including $54 billion for the long-planned Alaska LNG project, eight nuclear power plants, and a 6-gigawatt power plant in Texas. The investment is the first tranche of a $350 billion package Seoul committed to under last year's trade agreement with Washington. South Korean lawmakers have pressed for proof the spending makes commercial sense.
President Donald Trump announced on Wednesday that South Korea will invest $200 billion in US projects, including $54 billion to build the long-planned Alaska liquefied natural gas project. Trump made the announcement in the Oval Office, with Alaska Senator Dan Sullivan present.
The sum is the first set of major projects under a broader $350 billion strategic investment package South Korea agreed to as part of a trade deal with Washington last year, which included $150 billion for shipbuilding and $200 billion for strategic investments. Trump said: "they will invest up to $200 billion."
Alaska pipeline and nuclear plants
The package includes construction of eight large-scale nuclear power plants, a liquefied natural gas pipeline in Alaska and a power generation facility in Texas. That Texas facility is a 6-gigawatt plant. The Alaska LNG project itself includes an 807-mile (1,299-km) pipeline carrying gas from the North Slope to a liquefaction facility on Alaska's southern coast for shipment to Asian markets.
The project is designed to transport about 3.9 billion cubic feet of natural gas per day and produce up to 20 million metric tons of LNG annually, according to the White House. South Korea's industry ministry said last week that the Texas gas-fired plant was the first project selected under the $200 billion strategic investment program.
Lawmakers question commercial viability
But South Korean opposition lawmakers have raised concerns about the commercial viability and fiscal risks of the US investments. Kim Sung-won, who chairs parliament's trade committee, told Reuters that it was necessary to verify the commercial rationale of any investment placing a burden on the public before political or diplomatic considerations. South Korea's investment could provide a potential source of financing for the Alaska project, though Seoul has said its investments must meet commercial viability standards.
Buyer commitments remain preliminary
Japan's two biggest LNG importers, JERA and Tokyo Gas, have signed preliminary agreements to buy a combined 2 million metric tons a year from Alaska LNG if it is built. Developer Glenfarne said in March it had lined up commitments for 13 million tons a year but needed another 3 million tons to make all commitments binding.
Trump has repeatedly promoted the project as a way to expand US energy exports and strengthen ties with allies including South Korea and Japan.
Source: Commodities & Futures News
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