The Alaska Liquefied Natural Gas (LNG) Project, a key project promoted by the U.S. Trump administration, is accelerating toward a final investment decision (FID) within the year.
This project, which involves the construction of LNG production facilities, terminals, and pipelines, as well as the import of LNG, is prompting Korean companies involved in related projects to begin conducting full-scale feasibility studies.
This project is also likely to be promoted as a government investment project in the U.S., and related companies are closely monitoring the outcome of U.S.-ROK trade negotiations and the progress of the project.
According to energy industry sources on the 15th, this project, led by the Alaskan state government, will transport natural gas extracted from the Prudhoe Bay gas field in northern Alaska via pipeline to Nikiski, an ice-free port near Anchorage, where it will be liquefied and then shipped to demand regions such as Asia.
This project will require the construction of an 807-mile (approximately 1,297 km) pipeline running north-south through Alaska and the construction of infrastructure, including a liquefaction terminal. Initial estimates indicate a capital investment of over USD 45 billion (approximately 64 trillion won).
This project has been repeatedly promoted and withdrawn for decades amid controversies over environmental pollution and ecosystem destruction. However, it has been revived this year under the White House’s strong commitment, following the inauguration of the second Trump administration.
Glenfarn, an energy company that participated as a private investor alongside the Alaska Gasline Development Corporation (AGDC), a state-run company, recently announced plans to complete the FID for the project within this year. Commercial operation is targeted for around 2030.
Until just a few years ago, Japan and South Korea, the world’s second- and third-largest LNG importers after China, were reluctant to participate in the project. However, the Trump administration’s push for reciprocal tariffs has prompted governments to revisit the project.
South Korea is considering shifting existing LNG import contracts, including those from the Middle East, to the United States to reduce its large trade surplus with the United States and diversify its energy supply network.
In the private sector, companies in energy, construction, and steel are conducting feasibility studies to identify new business opportunities.
Amidst this situation, POSCO International signed a preliminary agreement with Glenfarne on the 11th, including LNG imports, becoming the first Korean company to formally consider participating in the project.
While this contract is non-binding, if the project’s profitability is verified through a feasibility study, the company plans to pursue an offtake agreement for the annual supply of 1 million tons of LNG for 20 years.
This contract also includes the supply of POSCO steel products for the construction of approximately 1,297 km of pipelines.
POSCO International is also involved in energy businesses, including the operation of the Myanmar LNG gas field and LNG terminal and related projects, as well as a trading business that exports steel produced by POSCO, the group’s steelmaker.
A POSCO International official stated, “If feasibility and profitability are secured, we will make a final decision on project participation through the company’s internal decision-making process, including the board of directors.” Furthermore, POSCO E&C, a subsidiary of the POSCO Group, has experience building domestic and international LNG terminals, and appears to be seriously considering the Alaska project as a project that could generate synergy at the group level.
Domestic construction companies with expertise in plant construction are reportedly interested in building LNG production facilities and liquefaction terminals. The steel industry is closely watching the supply of 42-inch (approximately 106.7 cm) steel pipes for the 1,297 km pipeline.
SeAH Steel, Husteel, and Nexteel are major domestic companies producing steel pipes, while POSCO and Hyundai Steel primarily produce hot-rolled steel sheets and thick plates, the raw materials for steel pipes.
In March, Lee Hwi-ryeong, Vice Chairman of SeAH Steel, attended a meeting with the Alaskan governor and other businesspeople and stated at the time, “If the Alaska project becomes a reality, we plan to participate.”
In addition to POSCO, conglomerates such as SK, Hanwha, and GS are reportedly exploring potential projects in areas such as energy.
However, since securing demand is paramount in the energy business, participation is expected to be fully considered once the project is fully operational.
Some speculate that the outcome of the government’s negotiations on the U.S. investment package could significantly impact the participation of Korea Gas Corporation and domestic companies.
During tariff negotiations in July, South Korea pledged a total of USD 350 billion in U.S. investment. Excluding the USD 150 billion allocated to the shipbuilding sector, the remaining USD 200 billion was earmarked for strategic industries, including energy.
In particular, the United States currently claims full decision-making authority on U.S. investment projects, so it is likely that the country will push for the Alaska project as the investment destination.
An industry official said, “If the project is structured with a government-led, stable revenue guarantee structure, companies will have no reason to refuse participation. The key will be how issues such as investment profit distribution are resolved.”
Source: YNA (in Korean)