Washington Tariff Pressure Pushes South Korea Toward Alaska LNG

Washington’s tariff pressure is pushing South Korea toward Alaska LNG, but Seoul’s conditional interest falls short of financing a project estimated to cost up to $54 billion, according to OilPrice. Discussed for decades, the costly and technically complex development has regained momentum under President Donald Trump, who is using tariff threats to press foreign partners into backing it.

Project Costs and Geographic Hurdles

Owned 75% by Glenfarne and 25% by the state of Alaska, the proposed $45 billion to $54 billion development would transport North Slope gas to domestic consumers and ultimately an export terminal at Nikiski in south-central Alaska. However, the project faces immense costs of connecting remote reserves to customers, with capital intensity approaching $2.7 billion per million tonnes of annual LNG capacity.

Geography remains a primary obstacle for the pipeline. Much of the infrastructure must be buried across difficult terrain, including shifting permafrost and mountain crossings reaching 1.5 km. Approximately 54% of construction can occur only during summer windows, introducing significant delay risks.

South Korean Negotiations and Market Dynamics

Washington’s threat of 25% tariffs on Korean exports led to an arrangement lowering the rate to 15% in exchange for $350 billion in investments and $100 billion in US energy purchases. South Korea’s parliament passed corresponding legislation in March 2026, with negotiations moving toward specific energy projects in September.

On October 1, Seoul outlined potential investments including a 6.47 GW gas-fired power project in Texas and eight US nuclear reactors costing a combined $120 billion. Alaska LNG was also placed under review, conditional on commercial and legal requirements being met. This conditional review falls well short of President Trump's previous statements that South Korea was to pay more than $50 billion toward the project.

Key facts

• Alaska LNG is a proposed $45 billion–$54 billion development owned 75% by Glenfarne and 25% by the state of Alaska.
• Capital costs approach $2.7 billion per million tonnes of annual LNG capacity.
• South Korea outlined potential US investments on October 1, placing Alaska LNG under conditional review.
• Nikiski-to-Korea voyages would take roughly 10–12 days, avoiding major transit canals and chokepoints.