South Korean lawmakers remain skeptical regarding the commercial viability of the investment and the financial risks South Korean enterprises might assume.
South Korean President Lee Jae Myung put the brakes on celebratory announcements by US President Donald Trump regarding Seoul's involvement in the heavily promoted Alaska LNG project, clarifying that the investment has not been finalized and will depend on economic viability and legal compliance. Trump had announced that South Korea would invest up to $200 billion in US energy infrastructure projects, characterizing the package as "one of the largest energy infrastructure investments in American history." However, South Korea's participation in the Alaska LNG project has yet to be finalized, as the government in Seoul evaluates the commercial viability of the project and the requirements of domestic legislation.
Lee "walks back" Trump's announcements
South Korea's investment plan encompasses nuclear power plants, a natural gas facility in Texas, and potentially the long-planned Alaska LNG project. In a post on Truth Social late Wednesday evening, Trump noted that the two nations agreed to collaborate on Alaska LNG, valuing the project at $50 billion. The statement prompted a reaction from Lee Jae Myung. In a post on X on Thursday, the South Korean president emphasized that participation in Alaska LNG depends on its economic viability and legal compliance. He added that investments in nuclear power plants should also be evaluated individually based on the commercial feasibility of each facility.
The "scaling back" of the $50 billion deal
Trump had presented the South Korean investments as a given, maintaining that both countries had agreed to proceed with Alaska LNG, with the project value reaching $50 billion. However, the joint statement issued earlier on Wednesday stated that advancing the project would depend on "commercial logic," without specifying concrete capital allocations for the effort. The Alaska LNG plan envisions transporting natural gas over approximately 1,300 kilometers from fields on Alaska's North Slope to the southern part of the state, where it would be liquefied for export to Asian energy markets. The project has faced years of questions regarding its economic viability due to the massive initial investments required. Industry Minister Kim Jung-kwan had described it last year as a "high-risk" project, pointing out that South Korea's participation would be difficult without generating sufficient cash flows.
Texas natural gas plant set at $22.3 billion
In total, the investment package includes $22.3 billion for a 6,472 MW natural gas-fired power generation plant in Encinal, Texas. The facility will supply electricity to co-located data centers. The project will be developed by Related Companies and American utility NextEra Energy. The first phase is scheduled to enter commercial operation in 2029, while the full installation is projected to come online phased through 2032. Trump argued that the investments will translate South Korea's commitments into "massive construction projects" and create tens of thousands of US jobs. "These are giant energy projects that add productive capacity to the United States," Trump stated. "This means new construction, new production, and great jobs for American workers."
$120 billion in nuclear projects
An additional $120 billion has been earmarked for plans to build eight large-scale nuclear reactors in the US. Of this amount, $100 billion is designated for construction costs, with another $20 billion set aside as contingency reserves. The nuclear agreement was signed by the governments of both nations, alongside Westinghouse Electric, Korea Electric Power Corp., and Korea Hydro & Nuclear Power. The plan also includes exploring a potential significant minority stake by South Korean companies in Westinghouse. However, those specific terms remain subject to commercial negotiations.
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