Minister of Trade, Industry and Energy Ahn Duk-geun meets with Alaska Governor Mike Dunleavy at the Plaza Hotel in Jung District, Seoul, on March 25, 2025. (Photo provided by the Ministry of Trade, Industry and Energy
SEOUL, March 31 (Korea Bizwire) — The government of South Korea faces mounting pressure from the United States to commit to purchasing liquefied natural gas (LNG) from Alaska, a move that could carry significant economic and geopolitical consequences for Seoul.
But despite a visit by Alaska Governor Mike Dunleavy last week and growing American expectations, South Korea remains hesitant, caught between strategic diplomacy and the substantial risks of a $44 billion energy project.
In a series of interviews during his visit to Seoul on March 26, Governor Dunleavy made an unusually direct appeal, urging South Korea to support the long-stalled Alaska LNG project by beginning with a firm purchase agreement.
“If Korea does not purchase LNG—or at least clearly express intent—will that help resolve its trade deficit?” he asked. “Will it genuinely benefit Korean companies hoping to supply ships, pipes, and steel modules for the project? The key is Korea committing to buy Alaskan gas.”
Dunleavy’s remarks signaled a sharpened tone from Washington, aligning energy diplomacy with broader trade negotiations. Stressing his close ties with former President Donald Trump, Dunleavy implied that LNG cooperation could influence upcoming U.S.-Korea tariff discussions.
His visit, while technically a state-level initiative, bore the hallmarks of an unofficial envoy mission advancing Trump-aligned trade and energy interests.
A view of Alaska (Image courtesy of Pixabay/CCL)
Yet despite the fanfare, Dunleavy left Seoul without securing any letters of intent or investment commitments from Korean entities. Neither the government nor major players in the energy or steel sectors made public moves toward a binding agreement.
This reflects Seoul’s growing dilemma. On one hand, participation in the Alaska LNG project could offer leverage in upcoming U.S. tariff talks, particularly as American policymakers scrutinize Korea’s trade surplus. On the other, the scale and uncertainty of the project make it a daunting prospect.
Even if South Korea were to join, LNG imports wouldn’t begin until at least 2029 or 2030—and only if construction moves forward smoothly in Alaska’s harsh climate and complex environmental landscape.
The Korea Gas Corporation (KOGAS), which supplies around 80 percent of the country’s LNG, is actively seeking new long-term suppliers following the expiration of contracts with Qatar and Oman. In that context, Alaskan LNG isn’t off the table—provided the price is competitive and the business case solid.
Alaska Gov. Mike Dunleavy (C) speaks at a joint media interview session held at Conrad Hotel in Seoul on March 26, 2025, in this photo provided by the American Chamber of Commerce in Korea. (Image courtesy of Yonhap)
Dunleavy reportedly met with KOGAS executives during his trip, further fueling speculation that South Korea may be considering a future deal.
However, officials remain cautious. “The project hasn’t reached the construction phase,” one government source told Yonhap News Agency on March 31. “Even if imports eventually happen, it will be years down the line. We need more clarity on volumes, pricing, and investment terms.”
The project’s estimated cost—roughly one-tenth of South Korea’s annual budget—has long been a sticking point. Past attempts involving ExxonMobil and BP were abandoned due to profitability concerns and logistical hurdles.
Now, with global carbon neutrality goals, rising geopolitical instability, and volatile energy demand forecasts beyond 2030, the long-term viability of the project remains in question.
What’s more, the current political vacuum following the impeachment of President Yoon Suk-yeol has left Seoul without the high-level decision-making capacity required for such a major strategic investment.
With leadership uncertainty expected to persist into 2026, no official has emerged with the authority—or appetite—to greenlight tens of billions of dollars in energy spending abroad.
Some observers suggest Seoul may be closely watching Tokyo’s next move. Japan, facing similar energy security concerns and trade dynamics, could provide a reference point for how to navigate American pressure without overcommitting to a high-risk venture.
As one energy executive put it, “If we stay out, we risk trade friction with the U.S. If we step in, we’re wading into deep waters without knowing the tide. What’s needed now is a strategic, measured judgment—based on national interest, not diplomatic pressure.”
The coming months, particularly as bilateral tariff talks escalate, may prove decisive. Whether South Korea chooses to act—or wait—could shape not only its energy future but its broader economic relationship with the United States.
Ashley Song (ashley@koreabizwire.com)
