NEW YORK — U.S. President Donald Trump unilaterally announced a Korean liquefied natural gas development project in Alaska that has yet to be finalized in bilateral talks, moving to defend a Republican Senate seat in the battleground state ahead of the November midterm elections. The core of the announcement is that more than $50 billion of the $200 billion in U.S. investment Korea pledged last November — in exchange for a tariff cut from 25% to 15% — will go into the Alaska project. The Korean government, caught off guard by the move, says it will make a decision only after verifying commercial viability as far as possible, since the economics of the gas field have remained unproven for nearly 60 years since its discovery. Diplomatic observers also see the announcement as purely political messaging. With the direction of Korea's U.S. investment now potentially hinging on the midterm outcome, a new variable has emerged for Korea's foreign exchange and stock markets.
Trump: "Korea Will Develop Alaska LNG and Build Eight Large Reactors" — Announcement Made Alone, Ignoring the Agreement
Reuters reported on the 29th of last month that Trump was expected to announce Korean investment projects in the United States at the White House in Washington the following day. The report said the announcement would likely include a plan to invest $54 billion (about 73 trillion won) in the Alaska LNG development project.
That differed substantially from what the Korean government had recently reported to the National Assembly on the status of its U.S. investment plans. Industry and Trade Minister Kim Jung-kwan told a full session of the National Assembly's Trade, Industry, Energy, SMEs and Startups Committee on the 22nd that the first project would be the construction of the Encinal combined-cycle gas power plant in Texas. The construction of eight large nuclear reactors in the United States and the Alaska LNG development project were classified as matters for later discussion. Following their summit last November, Seoul and Washington agreed that the United States would lower tariffs from 25% to 15% while Korea would invest $150 billion in shipbuilding and $200 billion in strategic industries. The agreement also stipulated that the United States would not demand more than $20 billion a year, to protect stability in Korea's foreign exchange market, and that Korea could request adjustments to the amounts and timing of funding.
Those concerns materialized immediately. As foreign media had reported, Trump announced the Korean investment in the Alaska LNG project on the 30th from the Oval Office, joined by Commerce Secretary Howard Lutnick, Interior Secretary Doug Burgum, Energy Secretary Chris Wright, Republican Sen. Dan Sullivan of Alaska and Alaska Gov. Mike Dunleavy. "Thanks to the agreement my administration reached with Korea, I am pleased to announce the largest energy infrastructure investment in American history," Trump said, adding that the Korean government would invest up to $200 billion. "Six gigawatts of power generation facilities, eight new large nuclear plants and an Alaska LNG pipeline will be built," he said. "Korea paid money to lower its tariffs, and part of that money is going into this project."
Lutnick said at the event that more than $50 billion would be invested in the Alaska LNG project, with $120 billion going toward the eight nuclear reactors and $22 billion to the Texas gas power plant. He added that the eight large reactors would be built in states including Ohio, Tennessee, South Carolina and Kentucky.
Shortly after the White House event, Trump posted on his social media platform Truth Social that he had met Korean President Lee Jae-myung in New York and that the two had agreed to launch $200 billion in new investment in the United States. He was referring to the Korea-U.S. summit held in New York on the sidelines of the U.N. General Assembly on Sept. 22 last year. Trump said the two countries had agreed to begin cooperating on the $50 billion Alaska LNG project, and that it would develop the vast resources of the great state of Alaska, build new American gas infrastructure and put outstanding American workers to work building it. There was no mention anywhere of further negotiations needed with Korea.
Harsh Weather, Huge Costs and Environmental Issues Have Kept the Project Frozen for 58 Years Since the Gas Field Was Found
Trump's announcement of the Alaska LNG project, made without any coordination with Korea, came as a shock to the Korean public. The project would move natural gas produced on the North Slope, Alaska's northernmost region, through a roughly 800-mile (1,300-kilometer) pipeline to the southern port of Nikiski, where it would be liquefied for supply to the U.S. and overseas markets. According to Reuters, the annual LNG production target is up to 20 million tons. Total project costs are estimated at $44.5 billion to $54.5 billion (about 60 trillion to 74 trillion won). The project's biggest advantage is that the shipping distance from Alaska to East Asia is shorter than from LNG terminals on the U.S. Gulf Coast.
The problem is that the project faces a formidable path and has been delayed repeatedly. Plans to develop natural gas in northern Alaska date back to the discovery of the gas field in 1968, now 58 years ago. Bitter cold and frozen ground make construction conditions poor, and profitability remains unverified. The industry estimates that pipeline construction alone would cost $13.2 billion to $16.9 billion (about 18 trillion to 23 trillion won). If upfront costs run too high, Alaskan LNG could become too expensive to compete with supplies from other regions. Shifting views on LNG projects with each change of U.S. administration are another obstacle to the project's stability. Global oil majors including Exxon Mobil, BP and ConocoPhillips entered the project in 2014 but withdrew in 2017 amid enormous costs, questions about economic viability and disputes over pollution and ecological damage.
Since 2017, the state-run Alaska Gasline Development Corp. (AGDC) has taken over the project. In March last year, U.S. energy infrastructure developer Glenfarne joined by acquiring a 75% stake in 8 Star Alaska, an AGDC subsidiary that holds the project assets. AGDC retains the remaining 25%.
The project regained momentum after Trump returned to office. Shortly after his inauguration in January last year, Trump designated Alaska LNG development a top priority through an executive order, instructing officials to pursue sales of the gas to the United States and Pacific allies. In January this year, Trump said work had begun on an Alaska pipeline project to export natural gas to Asia, claiming he had struck trade deals with Korea and Japan and secured an unprecedented level of funding.
Even with Trump's backing, the project slipped. A final investment decision (FID) on the pipeline, originally set for the end of last year, was pushed into this year because Glenfarne failed to secure its targeted volume of LNG purchase contracts. The current plan calls for a pipeline FID this year, an FID on export facilities next year and first LNG exports in 2031. "Pipeline construction takes three years, and we can break ground immediately once financing is in place," Glenfarne Group Chief Executive Brendan Duval said at the White House event on the 30th. "Three years after construction starts we can supply cheap gas to Alaska, and five years out we can begin LNG exports."
POSCO International signed a heads of agreement (HOA) on a strategic partnership with AGDC and Glenfarne in December last year. Under the deal, it would purchase 1 million tons of Alaskan LNG a year for 20 years, with POSCO supplying steel for pipeline construction. An HOA is a stage at which key terms are agreed before a definitive contract.
A Blatant Vote-Winning Play as the Senate Map Turns Shaky — Trade Pressure Could Grow With the Result
Diplomatic observers believe Trump presented Korea's investment in the Alaska LNG project as a done deal with the Nov. 3 midterms in mind. Alaska has long been one of the most reliably Republican states in the country, with the party winning every presidential and Senate race there for decades. In the 2024 presidential election, Trump took 54.5% of the vote in the state, far ahead of Democrat Kamala Harris at 41.4%.
This time, however, the mood appears to be shifting. Sullivan, the incumbent, is facing a strong challenge from Democratic candidate Mary Peltola. A Republican loss in Alaska would put the party's Senate majority at risk. Washington had expected Democrats to retake the House in these midterms while Republicans held the Senate — a forecast that may now prove wrong.
The Senate race in Texas, a Republican stronghold, has already moved out of the toss-up column and is now rated as leaning Democratic. Ohio and South Carolina, which Lutnick cited as sites for the large nuclear plants, were also once Republican-leaning but are now considered competitive. On the 28th of last month, Trump announced that Mesabi Metallics, an affiliate of an Indian conglomerate, would build a $15 billion steel mill in Iowa. Iowa, which Trump carried with 55.7% in the 2024 presidential election, has also become a tight race.
At the White House announcement on the 30th, Trump went out of his way to highlight Sullivan. "Every energy project is my accomplishment, and I got it done working with Sen. Sullivan," he said, claiming the project would create 12,000 construction jobs and 1,000 operating jobs. He called Sullivan an outstanding senator who deserved full credit for the many jobs created, adding that he had listened to his views on Alaska for a long time. "This is the most important project in our state," Sullivan said. "It will let our children and grandchildren stay in Alaska and enjoy a bright and wonderful future."
Signs that Trump raised the Alaska LNG investment for political purposes also appear in the fact sheet on Korea-U.S. strategic investment projects. According to the fact sheet released by the Commerce Department on the 30th, the two countries agreed to begin work on advancing the Alaska LNG project subject to commercial reasonableness under the strategic investment memorandum of understanding and to meeting all requirements under domestic law. In other words, the project will not be confirmed until it satisfies economic and legal requirements in both countries — the same position the Korean government has maintained.
Seoul pushed back by reiterating its existing principles. On X, formerly Twitter, President Lee said on the 1st that among the U.S. investment projects announced by Washington, the two sides had agreed to begin "working" on the Alaska LNG project on the premise that commercial viability is confirmed and that Korean legal procedures are followed. "For nuclear plants as well, commercial viability must be guaranteed on a plant-by-plant basis," he said. On profit sharing, he said that for all investment projects, profits would be split 50-50 even for projects whose principal and interest have been repaid. Kim, the minister, said at a briefing at the Sejong government complex the same day that Korea and the United States share the understanding that the Alaska project will not proceed without commercial reasonableness. "I raised a strong objection with Secretary Lutnick," he said.
Some in diplomatic circles urge caution, saying Trump's unilateral move on the Alaska project cannot be dismissed entirely. If Republicans narrowly hold the Alaska Senate seat, Korea's investment in the LNG project could effectively become a campaign promise. With Lutnick having already cited specific dollar figures, that could translate into significant trade pressure on Seoul. Share price volatility at the companies involved could also rise sharply depending on the midterm results.
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