[Edaily Kim Sang-yoon· Reporters Jeong Doo-ri and Gong Ji-yu] It has been confirmed that South Korea and the United States have agreed not to exclude the Alaska liquefied natural gas (LNG) project—estimated to cost approximately $67 billion—from their U.S. investment cooperation framework, but have decided to further review the project’s feasibility and participation conditions rather than proceeding with an immediate investment. If the project is selected as an official investment initiative in the future, a plan is being discussed whereby a special purpose vehicle (SPV) established for the project would acquire the “project development rights” from the existing developer.
The government is expected to first place the Alaska LNG project on the list for follow-up consultations regarding U.S. investment, and then present Alaska’s tax incentives, support from the U.S. federal government, construction cost reductions, and competitive LNG import prices as prerequisites for investment participation. The government’s position is that it will be difficult to select the project as an official investment initiative unless sufficient support and price competitiveness are secured.
According to a comprehensive report by Edaily on the 13th, South Korea and the United States are coordinating a plan to announce their strategy for U.S. investment projects on the 18th, following a report to the National Assembly on the 17th. This plan is expected to include three projects: the Encinal LNG integrated utilization project, the construction of eight U.S. nuclear power plants, and the Alaska LNG project. However, the terms of agreement and the level of investment confirmation will vary by project.
The Encinal LNG integrated utilization project is set to be finalized as the first U.S. investment project, with plans to sign a binding final contract. The project to build eight U.S. nuclear power plants will be addressed in the form of a framework agreement outlining the basic direction for future project implementation, while the Alaska LNG project is expected to be included in the U.S. investment plan as a subject for follow-up discussions—where project feasibility and participation conditions will continue to be reviewed without a firm investment commitment.
The Korea-U.S. Strategic Investment Project Management Committee is preparing to commission a consulting study to conduct a full-scale feasibility review of the eight nuclear power plants and the Alaska LNG project. The South Korean government’s position is to include these projects in the scope of discussions but to determine the investment amount and method only after confirming tax incentives and LNG prices.

◇Construction of a 1,300 km gas pipeline and liquefaction terminal… Development rights to be acquired upon selection
The Alaska LNG project is a mega-scale energy infrastructure initiative that will transport natural gas produced in the northern North Slope region to Nikiskie in the south via a pipeline approximately 1,300 km long. It involves the construction of gas processing facilities, a long-distance pipeline, and a liquefaction facility and export terminal with an annual capacity of approximately 20 million metric tons.
The project will be carried out in two phases. In Phase 1, a gas pipeline to supply natural gas to central and southern Alaska will be built first; in Phase 2, an export-oriented liquefaction plant and terminal will be constructed in Nikiski.
Local demand for the Phase 1 pipeline is relatively clear, as it will address the natural gas shortage in southern Alaska. In contrast, for South Korea to receive LNG supplies, the Phase 2 liquefaction facility and export terminal—which would entail enormous costs—must be completed. If only the pipeline is built, natural gas can be supplied within Alaska, but LNG cannot be exported to South Korea.
The project is currently led by Glenfarne, a U.S. private energy company. Glenfarne holds a 75% stake in “8Star Alaska,” the project entity promoting the Alaska LNG project, while the Alaska Gasline Development Corporation (AGDC), an agency of the State of Alaska, holds the remaining 25%.
The total project cost is estimated at approximately $67 billion. In contrast, the construction cost estimate based on 2026 prices—presented by Glenfarne to the Alaska State Legislature last June—ranges from $44.5 billion to $54.5 billion. Glennfarne estimated the construction cost for Phase 1 of the gas pipeline at $13.2 billion to $16.9 billion, for Phase 2 of the liquefaction facility at $23.6 billion to $28.4 billion, and for the northern gas processing facility at $7.7 billion to $9.2 billion, respectively. The actual total project cost could increase depending on future construction delays, fluctuations in equipment prices, contingency reserves, and financing costs.
If Alaska LNG passes the feasibility study and is selected as an official investment project in the U.S., a plan is being discussed whereby the project SPV would acquire “project development rights” from the existing developer. The development rights do not refer to exploration and production rights for the North Slope gas field, but rather encompass project-related rights and assets—such as permits and licenses, design deliverables, and contractual rights—accumulated to advance the Alaska LNG infrastructure project. The specific transaction structure and the scope of the acquisition are expected to be determined following due diligence.
The purchase price for the development rights is likely to be calculated by verifying the costs incurred by the existing developer in advancing the project and then adding a certain premium to reflect the value of the assets to be acquired and the project’s progress.
Even if the project development rights are acquired, the funds required for the construction of the gas pipeline, liquefaction plant, and export terminal must be secured through a separate financing structure during the Final Investment Decision (FID) process. Another option being discussed is for the existing developer to enter into a separate agreement with the project SPV and continue to be responsible for subsequent development and construction management. Under this approach, the SPV would secure the project-related rights and assets while leveraging the existing developer’s business experience and local network.
A source familiar with the matter stated, “The project SPV would take over project-related rights and assets from the existing developer, and the existing developer could participate in subsequent project management,” adding, “The specific transaction structure and price, including whether to acquire an equity stake, must be determined following a feasibility study and subsequent negotiations.”

◇KOGAS Remains Cautious… State Tax Incentives Are the Final Variable
The government has not yet finalized the Alaska LNG project as an investment initiative due to uncertainties regarding pricing and the construction schedule. KOGAS is concerned that if the costs of constructing a long-distance pipeline through permafrost regions and building the liquefaction facilities are factored into the LNG price, the project could become less price-competitive than LNG from the U.S. Gulf Coast.
In particular, for Korea to receive LNG supplies, not only must the Phase 1 pipeline be completed, but the Phase 2 liquefaction plant and export terminal must also be finished; however, given Alaska’s climatic conditions, the timing of groundbreaking and completion remains uncertain. It is reported that KOGAS, as the LNG purchaser, maintains the position that it can only determine whether to participate once the likelihood of completing the liquefaction facility and terminal, the start date of supply, and the import price are specified.
In contrast, the POSCO Group is relatively more proactive, as it can link the supply of steel pipes for the gas pipeline with LNG imports. POSCO International has signed a Heads of Agreement (HOA) with Glenfarn to purchase 1 million metric tons of LNG annually for 20 years and has also agreed to supply steel and make capital investments prior to the Final Investment Decision (FID). However, the scale of the investment has not been disclosed, and the final contract for LNG purchases has yet to be signed.
Tax incentives from the State of Alaska are also a key variable that will determine the project’s viability. The developer argues that institutional mechanisms are needed to predict long-term tax burdens, such as property taxes, in order to secure the massive initial investment required. Alaska Governor Mike Dunleavy pushed for a compromise that would reduce the project’s long-term property tax burden and apply a separate tax system, but failed to secure the support of the state legislature.
In the upcoming U.S. midterm elections this November, the entire Alaska State House of Representatives and half of the State Senate will be up for election. If a legislative landscape favorable to the project emerges after the election, discussions on tax reform could resume. However, since the Alaska State Legislature operates as a bipartisan coalition, it is difficult to assume that tax incentives will be finalized based solely on an increase in Republican seats.
Yoo Seung-hoon, a professor in the Department of Future Energy Convergence at Seoul National University of Science and Technology, stated, “An agreement must be reached on the condition that economic viability—including tax incentives—is secured,” adding, “It is necessary to make it clear that it will be difficult to move forward with the project if these conditions are not met.”