South Korea to invest $200 billion in US projects including Alaska LNG, White House says

A White House official said on Wednesday that President Donald Trump will announce plans for South Korea to invest $200 billion in United States projects, including $54 billion towards the long-planned Alaska liquefied natural gas (LNG) project.

The announcement sets out the first major projects under a wider $350 billion strategic investment package that South Korea committed to as part of a trade agreement with Washington last year. That package consists of $150 billion for shipbuilding and $200 billion for strategic investments.

According to the official, the projects include the Alaska LNG pipeline, eight large-scale nuclear power plants and a 6-gigawatt power generation facility in Texas.

The announcement is part of a series of economic and investment deals Mr. Trump has highlighted ahead of November's midterm elections, as he seeks to reinforce his economic record amid voter concern over the conflict with Iran and high petrol prices. The Alaska LNG project also comes as Republicans seek to retain incumbent Senator Dan Sullivan, who faces Democrat Mary Peltola.

"Today, President Trump will announce major energy infrastructure investments that deliver on his day one promises to unleash American energy, unlock Alaska's extraordinary resource potential, and accelerate America's nuclear energy renaissance," White House spokesperson Taylor Rogers said.

The Alaska LNG project would include an 807-mile pipeline carrying natural gas from the North Slope to a liquefaction facility on Alaska's southern coast, from where the fuel could be shipped to Asian markets. According to the White House, the project is designed to transport about 3.9 billion cubic feet of natural gas a day and produce up to 20 million metric tonnes of LNG a year.

Mr. Trump has repeatedly promoted the project as a way to expand US energy exports and strengthen ties with allies, including South Korea and Japan.

The project has faced years of uncertainty over its cost, financing and commercial viability. South Korea's investment could provide a potential source of financing, although Seoul has previously said that projects under its US investment package must meet commercial viability standards.

South Korean opposition lawmakers have raised concerns about the commercial viability and fiscal risks of investing in US projects.

"Before considering political needs or diplomatic demands, however, it was necessary to thoroughly verify the commercial rationale and viability of any investment that put a tremendous burden on the public," Kim Sung-won, a South Korean lawmaker who chairs Parliament's trade committee, told Reuters on Wednesday.

South Korea's industry ministry said last week that a gas-fired power plant of more than 6 gigawatts in Encinal, Texas, was the first project selected under the $200 billion strategic investment programme. The ministry was also considering the construction of eight large nuclear reactors and the Alaska LNG project.

Japan's two biggest LNG importers, JERA and Tokyo Gas, have signed preliminary agreements to buy a combined 2 million metric tonnes a year from Alaska LNG if it is built.

Glenfarne, the project's developer, said in March that it had lined up commitments for 13 million tonnes a year, but needed another 3 million tonnes to secure financing and make all commitments binding. The company did not immediately respond to a request for comment about Wednesday's plan.

The eight nuclear plants would form part of Mr. Trump's effort to expand US nuclear generation as electricity demand rises, including from data centres and manufacturing. South Korea has been discussing a potential investment in US nuclear projects as part of the broader package.

The Texas gas-fired power project is expected to supply electricity to energy-intensive facilities, including semiconductor plants and data centres. South Korean officials have said the project was selected after reviews of its commercial merits.

LNG is natural gas cooled to liquid form so that it can be transported by ship. The Alaska project has been discussed for years as a way to commercialise the state's North Slope gas reserves, which have so far lacked a route to market.