President Donald Trump is pressuring South Korea to participate in the Alaska liquefied natural gas (LNG) project, making it a key issue in the upcoming national audit of the Ministry of Trade, Industry and Energy. While official documents from both countries state that the Alaska LNG project is under 'review,' Trump has suggested that South Korea's investment is already confirmed, highlighting a discrepancy in perceptions between the two nations.
According to the National Assembly and related ministries, the National Assembly's Trade, Industry, Energy, and Small and Medium Enterprises Committee will conduct a national audit of the Ministry of Trade on October 6. This year's audit is expected to address major issues such as strategic investment projects in the U.S., the push for Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) membership, and mega-projects.
The most significant issue is the $200 billion strategic investment in the U.S. On October 1, South Korea and the U.S. announced plans for three projects: the Texas gas combined cycle power 'Project Star,' the South Korea-U.S. nuclear framework 'Project Power,' and the Alaska LNG 'Project North.'
Among these, the Texas Encinada gas combined cycle power plant, with a total project cost of $22.3 billion, has been confirmed as the first strategic investment project. However, the project still faces challenges in securing a buyer for a stable long-term power purchase agreement (PPA). The scope of participation for domestic companies remains a contentious issue.
For the nuclear project, an agreement was reached to build eight large nuclear reactors in the U.S. with a maximum investment of $120 billion from the South Korea-U.S. Strategic Fund. However, specific project sites and construction schedules have yet to be finalized, and negotiations regarding the acquisition of Westinghouse shares are still ongoing. The government has stated that the final decision on whether to proceed with individual projects will depend on their commercial viability and legislative processes.
The largest gap between the two sides lies in the Alaska LNG project. According to a joint fact sheet, both countries have only agreed to begin reviewing the Alaska LNG project. The official announcement states that the decision to proceed with the project will be based on the commercial viability and compliance with domestic laws as outlined in the strategic investment memorandum of understanding (MOU) signed last year.
In contrast, President Trump announced on October 1 that South Korea is expected to participate in the Alaska LNG project. U.S. Secretary of Commerce Howard Lutnick also stated that investments exceeding $50 billion will be made in Alaska.
In response, Minister of Trade, Industry and Energy Kim Jeong-kwan expressed regret, stating, 'There are aspects that go beyond what was agreed upon.' The government reaffirmed that neither the investment in the Alaska LNG project nor the investment amount has been confirmed, and that the project will not proceed without ensuring commercial viability.
However, Trump continues to apply pressure, suggesting that South Korea will soon sign on to the Alaska LNG project and warning that if it does not materialize, he may impose tariffs or increase investment amounts. He has also claimed that the project includes an $8.4 billion enhanced oil recovery (EOR) initiative. The South Korean government has clarified that this claim is not part of the existing agreement.
As a result, the national audit is expected to see a debate between the ruling and opposition parties regarding the specific investment amounts discussed during the South Korea-U.S. negotiations on the Alaska LNG project. The opposition is likely to question whether the government has engaged in more detailed discussions with the U.S. while reporting to the National Assembly that the project is still in the 'review stage.' Meanwhile, the government is expected to emphasize that the scope of official agreements and the confirmation of individual project investments are separate issues.
The push for CPTPP membership is also a major issue. According to a recent economic impact analysis by the government, if South Korea joins the CPTPP, its real gross domestic product (GDP) is projected to be 0.38 percentage points higher than if it does not join, ten years after the agreement takes effect. Manufacturing output is estimated to increase by an average of 6.3 trillion to 6.7 trillion won annually over the 15 years following the agreement's implementation.
Conversely, agricultural and fisheries production is expected to decrease by an average of about 850 billion won annually. Therefore, questions regarding the government's specific timeline for pursuing CPTPP membership, pre-consultations with member countries like Japan, and measures to mitigate agricultural and fisheries losses are anticipated during the national audit.
In addition to trade issues, disputes surrounding industrial policies are also expected. A notable example is the three mega-projects. The government plans to accelerate advanced industry projects such as semiconductors and secondary batteries based on large-scale private investments, while focusing regulatory, tax, and financial support through mega-special zones. However, the opposition has criticized the government's encouragement of large-scale corporate investments as effectively 'twisting the arms' of businesses.
* This article has been translated by AI.
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