Alaska’s long-delayed LNG project has gained renewed attention due to political pressure from the Trump administration, which is using tariff threats to secure foreign investment. South Korea, facing a 25% tariff on its exports, negotiated a reduced rate in exchange for $350 billion in investments, including $100 billion in US energy purchases. While South Korea’s parliament approved corresponding legislation in March 2026, its commitment to Alaska LNG remains conditional, falling short of President Trump’s announcement that Seoul would contribute over $50 billion.
The Alaska LNG project, estimated to cost between $45 billion and $54 billion, faces significant challenges, including its remote location, complex terrain, and high construction costs. The pipeline alone would stretch 1,300 kilometers across difficult terrain, with about 54% of the work possible only during the summer. Additionally, unresolved state-tax arrangements and potential cost overruns add further uncertainty to the project’s viability.
Despite Trump’s earlier claims of Japanese involvement, Japan’s participation has narrowed to a non-binding agreement to purchase 1 million tonnes of LNG annually for 20 years. South Korea’s Posco International has made a similar commitment, while other potential buyers include Taiwan, Thailand, and TotalEnergies. However, these agreements do not address the project’s financing or risk allocation, leaving its future uncertain.
South Korea’s interest in Alaska LNG is driven by its need to secure reliable LNG supplies, particularly as demand for US LNG has increased due to geopolitical tensions. However, the project faces stiff competition from LNG Canada, which began exports in July 2025 and is expanding its capacity. South Korea’s trade minister previously dismissed Alaska LNG as a high-risk investment, and while tariff pressure has complicated this stance, the project’s underlying economics remain questionable.