Home / Business and Economy / Trump Pushes $54 Billion Alaska LNG; Seoul Cautious
Trump Pushes $54 Billion Alaska LNG; Seoul Cautious
2 Oct
Summary
- Alaska LNG project estimated at $44.5-$54.5 billion, a high cost.
- Project requires a long pipeline from Alaska's North Slope.
- South Korea is reviewing project's commercial viability for investment.
President Donald Trump is advocating for a substantial $54 billion investment in an Alaska liquefied natural gas (LNG) project, urging South Korean capital for its development. This initiative was announced on Wednesday as part of a larger $200 billion economic package for South Korea.
Seoul has responded cautiously, stating that no decision has been made regarding funding and that the project's commercial viability will be thoroughly assessed first. The Alaska LNG project, led by Glenfarne Group, is estimated to cost between $44.5 billion and $54.5 billion. This pricing is considerably higher than other US LNG export projects.
Experts note that the high cost, averaging $2.2 billion to $2.7 billion per million metric tons per annum of capacity, raises questions about its economic feasibility. This compares to US Gulf Coast projects generally costing under $1 billion per mtpa. A significant factor in the Alaska project's cost is the requirement for an 800-mile pipeline from the North Slope, estimated at $13.2 billion to $16.9 billion.
Supporters highlight the strategic advantage of Alaska's location, offering faster delivery to key Asian markets like Japan, South Korea, and Taiwan, potentially lowering shipping costs. They believe Asian buyers may pay a premium for secure gas supplies. However, concerns persist about whether the project can meet necessary commercial thresholds for investment, despite the developer's optimism that Trump's endorsement will aid in securing funding and accelerating decisions.
