The government is expected to make a decision on the 'Alaska liquefied natural gas (LNG) purchase,' which is mentioned as one of the cards for tariff negotiations with the United States, after October. This is because the U.S. side has indicated that it will provide preliminary information on the project in the fourth quarter, making substantial review difficult before then.
However, the information to be provided by the United States is expected to be limited to project costs and duration. Based on this, the government will need to estimate LNG prices, and if sufficient data is not available, the purchase decision may be further delayed.
According to the government on the 18th, the Ministry of Trade, Industry and Energy plans to review the purchase only after receiving the basic design information for the Alaska LNG project from the United States. Recently, the U.S. conveyed its position to share the relevant information in the fourth quarter.
The Alaska LNG project is a venture to develop a gas field with a size of 40 trillion cubic feet (ft³) located in Prudhoe Bay, at the northernmost point of Alaska, to extract, transport, and export natural gas. It is a representative energy project of U.S. President Donald Trump, aiming to sell 20 million tons (t) of LNG annually to the Asian market starting in 2031.
As the United States has been demanding purchase commitments from countries involved in tariff negotiations to secure demand for Alaska LNG, this has been utilized as a bargaining chip.
In fact, the state-owned oil company of Taiwan (CPC) signed a letter of intent (LOI) for purchase and investment with the Alaska Gas Development Corporation last March. It is reported that CPC plans to purchase 6 million tons annually. Thailand has also signed a contract to purchase 2 million tons of Alaska LNG annually for 20 years.
Our government has also weighed this as one of the options to avoid high tariffs. There are reports that some officials argue that since the LOI has no legal binding power, it should be signed quickly.
However, there is a growing consensus that meaningful review is impossible without information on Alaska LNG prices. Considering U.S. President Trump's emotional responses in tariff negotiations, there is also a perception that retracting a purchase intention later could be more risky.
A senior government official noted, 'We need to know the basic information to make a judgment, but we haven't even reached that preliminary stage,' adding, 'It’s not that we are offering to purchase first; the situation is such that we need to make a decision after receiving data from the U.S.'
However, even if the project design information is received from the U.S., there is a possibility that the government will find it difficult to make a decision on the Alaska LNG purchase in the short term. This is because the information to be received is not precise LNG price information but rather the project cost and duration that can only estimate the price.
A government official stated, 'We do not know how much information will be disclosed, so there is significant uncertainty even after October,' adding, 'Whether it's a memorandum of understanding (MOU) or LOI, we must first look at the information.'
The government sought to use investment in the Alaska LNG project as a bargaining chip, but the U.S. is reportedly focusing on demanding direct purchases of Alaska LNG. A government official explained, 'The U.S. stance is that we will take care of the investment, such as constructing pipelines or liquefaction plants.'