Industry minister says Alaska LNG has 'strategic value' as global energy routes shift

The Alaska liquefied natural gas (LNG) project could have strategic value for Korea despite concerns over its commercial viability, Minister of Trade, Industry and Resources Kim Jung-kwan stressed during a parliamentary audit on Tuesday.

“It is true that we had not considered the Alaska project [for U.S. investment] because its commercial viability was clearly low,” Kim said at the National Assembly in western Seoul. “LNG is no longer coming in from the Middle East after the war in the Middle East, and [supplies] from the Gulf are now coming around the Cape of Good Hope instead of through the Panama Canal."

The minister also pointed to the change in the U.S. government's stance, and therefore new conditions for the Korean government, toward the project.

“The United States also told us that the federal government, rather than the private sector, would lead the project,” Kim said, suggesting that changes in Washington's position and the global energy situation brought the Alaska LNG project into consideration for Korea’s U.S. investment plan.

The Trade Ministry commissioned feasibility studies in May for three U.S. investment projects, but the Alaska LNG project was not among them, according to Rep. Choi Soo-jin of the main opposition People Power Party (PPP).

“As I have repeatedly said, commercial viability is a prerequisite [to the investment],” Kim said in response to Choi’s question about whether the government would conduct economic and feasibility reviews.

U.S. President Donald Trump announced on Sept. 30 that Korea had agreed to invest more than $50 billion in the Alaska LNG project. Seoul had responded that although an investment was in progress, involvement was not set in stone.

"So I think it's something that's going to happen," U.S. Vice President JD Vance said on Monday when reporters asked whether the project would proceed despite Korea saying that no investment decision had been finalized. "Obviously, you still got to work out some of the details and the South Koreans, you know, have spoken to that."

During Tuesday's audit, lawmakers also clashed over the selection of a site for a proposed semiconductor project in the southwestern Honam region, which encompasses the Jeolla and Gwangju regions.

“Samsung and SK hynix reportedly submitted assessments to the government that a semiconductor project in Honam would be impossible because the region lacks sufficient electricity, water and workers,” Rep. Yoon Han-hong of PPP said. “But I keep hearing that the government is pushing ahead despite those assessments.”

The ruling Democratic Party (DP) countered the assertion.

“I had a chance to have dinner with the president of Samsung Electronics around March or April, and he asked whether there was about 2 million pyeong [2.6 square miles] of land in my constituency [Namwon, North Jeolla] that could be used for a semiconductor site,” Rep. Park Hee-seong of DP said. “SK has also talked in the past about semiconductor investment in Saemangeum.”

The Saemangeum area was designated for a project conceived more than three decades ago as a vast effort to create farmland along the west coast, but was subject to years of environmental controversy, legal battles and shifting development plans.

“Companies making investments on this scale would obviously have run the numbers,” Rep. Park added. “If Samsung and SK hynix chose the southwestern region because it has the water and electricity they need, that hardly amounts to the government twisting their arms.”

The industry minister agreed with the lawmaker’s statement.

When asked by Rep. Cho Ji-yeon of PPP about companies’ claims that they had not named any specific region during the semiconductor cluster site selection process, Kim said “the companies themselves” were the first to propose investing in the southwestern Honam region."

“The Trade Ministry has never disclosed the evaluation process when designating specialized zones for advanced strategic industries,” Rep. Back Hye-ryun of DP said. “Supreme Court precedent also says such information should not be disclosed because competitors could use it to infer corporate strategies.”

Kim echoed the concern that greater disclosure could expose sensitive information about Korea’s semiconductor strategy.

“The United States, China and Japan are intensely interested in how Korea builds semiconductor fabs so efficiently,” Kim said. “We have to be extremely cautious about releasing materials because we are concerned that any hint we provide could make its way to China.”

BY PARK JUN-KYU, RYU HYO-RIM [[email protected]]