[Edaily Jung Du-ri Kim Yeong-hwan Reporter] Although South Korea and the United States have unveiled major project plans for $350 billion in investment in the U.S., concerns are growing that future investment negotiations will not go smoothly as differences in calculations surrounding the Alaska liquefied natural gas (LNG) project have come to light.

While U.S. President Donald Trump emphasized that South Korea’s large-scale investment was virtually confirmed, the South Korean government drew a clear line, stating that the project is still in the “review stage” and can only proceed once its economic viability is secured. Consequently, the key challenge has emerged of how to reconcile U.S. pressure to attract investment with South Korea’s principle of profitability during the process of finalizing the specific projects for investment in the U.S.

◇ Kim Jeong-gwan Dismisses Claims: “Alaska Project Went Beyond the Agreement”

The fact sheet on U.S. investment released by South Korea and the U.S. on the 1st outlined plans to proceed with “Project Star,” a strategic investment initiative; “Project Power,” a nuclear power plant construction project in the U.S.; and “Project North,” an Alaska LNG project.

The difference in perspective between the two countries is most evident in the Alaska LNG project. On the 30th of last month (local time), while explaining South Korea’s strategic investments in the U.S. at the White House, President Trump highlighted the Alaska LNG project as a major investment target. The U.S. side even cited a specific figure, stating that approximately $54 billion would be invested in the project.

However, the agreement specified in the fact sheet is to “commence a review.” The two countries stated, “We have agreed to commence a review of the Alaska LNG project, subject to commercial viability and compliance with all relevant domestic legal requirements under the Strategic Investment Memorandum of Understanding (MOU).” This means that neither the scale of the investment nor whether the investment will actually take place has been finalized.

Kim Jeong-gwan, Minister of Trade, Industry and Energy, emphasized during a post-meeting briefing on strategic investment with the U.S. held at the Sejong Government Complex that day, “Regarding Alaska, the contents of the joint fact sheet represent the entirety of what the two countries have agreed upon,” adding, “The Korean and U.S. governments have agreed that the Alaska project will proceed only on the premise that it is commercially viable.”

He also publicly expressed regret over the U.S. side’s announcement. Minister Kim said, “The use of expressions that suggest specific figures or imply that the investment has been finalized goes far beyond what was agreed upon by the two countries,” adding, “I expressed my regret regarding this to U.S. Secretary of Commerce Howard Rutnick.”

The Alaska LNG project is a large-scale initiative involving the construction of a pipeline approximately 1,300 km long to transport natural gas produced in northern Alaska to the south, as well as the establishment of LNG liquefaction and export facilities. Although it has been in the works for over a decade, massive project costs, complex permitting processes, and challenges in securing local labor have been cited as major obstacles.

The U.S. is offering tax breaks, incentives, and support with permitting. The fact sheet also states that the U.S. will support the participation of South Korean suppliers, facilitate the signing of LNG purchase agreements at economically viable prices, and grant South Korea preferential access.

◇ Need to Verify the Feasibility of Recouping Investment in the U.S.

The focus of strategic investment in the U.S. is expected to shift from the total amount of $350 billion to verifying the profitability and feasibility of recovering investment capital for individual projects. The Alaska LNG project is likely to serve as the first test case for reconciling the differing interests of both countries.

Experts point out that the strategic value—such as energy security and supply chain diversification—must be distinguished from the economic viability of the investment. Given that this is a long-term project, construction costs, financing costs, LNG purchase prices, and expected rates of return must all be thoroughly evaluated.

Professor Yoo Seung-hoon of the Department of Future Energy Convergence at Seoul National University of Science and Technology stated, “Securing as much support as possible from the U.S. federal and state governments and ensuring the project’s viability will be key challenges moving forward.” He added, “Whether the U.S. side can boost the project’s viability through tax incentives, tariff relief, licensing support, the participation of Korean companies, and favorable LNG purchase terms will likely determine whether the investment actually proceeds.” He further emphasized, “Since the U.S. also has a stake in moving the project forward ahead of the midterm elections, South Korea must secure the most favorable terms possible during the negotiation process.”