SEOUL, October 03 (AJP) - South Korea's bill will double unless it agrees soon to fund a natural gas project in Alaska, U.S. President Donald Trump warned Friday (local time). The threat came two days after he announced a Korean commitment that Seoul says it never made.
Seoul's position is that neither the decision to invest nor the amount has been settled. The Alaska project would come out of the $350 billion investment package South Korea pledged last year in return for a cut in U.S. tariffs on its goods from 25 percent to 15 percent. Under that deal, a project must be commercially viable before Seoul commits money to it.
At the White House, President Trump rejected a reporter's suggestion that his announcement had been premature. He said South Korean representatives had been present when the project was discussed.
If South Korea did not want to take part, he said, that was fine with him, because he would simply charge South Korea more. When the point was raised again, President Trump told reporters to pass along the message that the amount would double if South Korea did not agree soon. He did not say what would double.
President Trump made the original announcement Wednesday in the Oval Office. He unveiled the first projects under the $200 billion strategic investment portion of the package there, and said part of the money South Korea paid for lower tariffs would go into an Alaska pipeline. Commerce Secretary Howard Lutnick put South Korea's share at more than $50 billion.
Industry Minister Kim Jung-kwan said Thursday that he had lodged a strong objection with Lutnick over an announcement that went beyond what the two sides had agreed. He said the agreed text on Alaska ran to three sentences and committed Seoul only to begin a review, subject to commercial viability.
The joint fact sheet released with the announcement names a gas-fired power plant in Encinal, Texas, as the first project. Construction of eight large nuclear reactors in the United States and the Alaska project are both left for further consultation.
The Encinal plant will have 6.3 gigawatts of capacity and a total cost of $22.3 billion, according to the government's report to the National Assembly last month. The reactor program is framed at about $120 billion.
The Alaska project would pipe natural gas about 1,300 kilometers from fields on the state's North Slope to Nikiski on the southern coast. There it would be cooled into liquid and shipped to buyers in Asia. Cost estimates start at about $44 billion, and much of the pipeline route crosses permafrost.
Kim told lawmakers last November that the project was high risk and would have difficulty meeting the commercial viability standard Seoul was seeking for its U.S. investments.
The dispute comes a month before the U.S. midterm elections on Nov. 3. In Alaska, Republican Sen. Dan Sullivan is seeking a third term against former Democratic Rep. Mary Peltola.
Earlier that day, President Trump announced a second project on Truth Social. "I am thrilled to announce the Republic of Korea Deal keeps getting BETTER! 8.4 Billion Dollars for an enhanced Oil Recovery Project," he wrote. The post did not say where the project was, who would run it, or who would pay for it.
Enhanced oil recovery extracts crude that ordinary pumping leaves behind, usually by injecting carbon dioxide, gas or water into an aging oilfield.
An industry ministry official said the project was not part of the bilateral strategic investment agreement and that Seoul had sent an inquiry to Washington.
At the Ministry of Foreign Affairs, Spokesperson Park Doo-soon said at a regular briefing Thursday that the government understood the Alaska announcement as a statement of the U.S. position.
Park said Seoul hoped "security consultations and various other issues" would move forward through close communication between the two countries, building on the consensus between their leaders.
Those consultations cover South Korea's plan to build nuclear-powered submarines and its push for expanded rights to enrich uranium and reprocess spent nuclear fuel. Both items were written into a joint fact sheet the two countries released last November, and talks on them stalled while the investment terms were being negotiated.
A foreign ministry official said the formal investment announcement was expected to lead to a schedule for the security talks.
Talks on revising the South Korea-U.S. nuclear cooperation agreement have not met since their first round in June.
AJP Takeaways
- U.S. President Donald Trump warned Friday that South Korea's bill would double unless it agreed soon to fund an Alaska natural gas project, without saying what would double, two days after announcing a Korean commitment that Seoul says it never made.
- Industry Minister Kim Jung-kwan said he lodged a strong objection with Commerce Secretary Howard Lutnick, who had put South Korea's Alaska share at more than $50 billion, and said the agreed text commits Seoul only to begin a review subject to commercial viability.
- Park Doo-soon, spokesperson for South Korea's Ministry of Foreign Affairs, said Seoul hopes security consultations covering nuclear-powered submarines and uranium enrichment and reprocessing will move forward, while talks on revising the South Korea-U.S. nuclear cooperation agreement have not met since June. This detail comes from the ministry's Thursday briefing, not from the White House exchange.
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