Lawmakers stress Alaska LNG project needs review

The commercial viability of two of three US investment projects need further verification, South Korea lawmakers stressed Thursday, following US President Donald Trump's announcement.

One of the two that needs further verification is the liquefied natural gas export project in Alaska involving the construction of a 1,300-kilometer natural gas pipeline traversing the Alaska state southward, for which the White House indicated a price tag of $54 billion. The other is a $120 billion project to build eight nuclear reactors across the US.

The National Assembly, to which any investment plans under South Korea's $350 billion US investment package must be reported, highlighted that the $22 billion commitment to a Texas gas-fired plant is the only project for which commercial viability has so far been verified.

If Seoul fails to present the project's commercial viability, the project will additionally require the consent of both the Strategy and Finance Committee and the Trade, Industry, Energy, SMEs and Startups Committee at the National Assembly.

Rep. Han Jeoung-ae of the Democratic Party of Korea said that the country's investment in the Alaska LNG project has not been confirmed.

"(Seoul) will decide on whether to invest in the project after sufficiently reviewing the project's commercial viability in accordance with the domestic legal procedure," Han wrote via Facebook on Thursday.

She added in the post that Trump's announcement of South Korea's commitment to the Alaska LNG project "appears to have sought to highlight the US' stance on the project."

Rep. Park Jee-hye of the Democratic Party echoed Han's view, raising doubts about the commercial viability of the Alaska gas project and citing the possibility of demand for fossil fuel shrinking in the years to come.

"Large-scale gas pipelines and LNG liquefaction facilities are long-term infrastructure assets designed to operate for decades," Park said on Facebook.

"If the demand for natural gas declines faster than anticipated in the future, there is a risk that these facilities could become stranded assets, which could make the recovery of massive initial investments almost impossible."

Rep. Oh Gi-hyoung of the Democratic Party also said on Facebook that the National Assembly will make its decisions "based on whether the projects are commercially viable."

However, Rep. Kwon Chil-seung of the Democratic Party, who serves as the ruling party's policy chief, said the announcement on the investment "was a meaningful achievement ... at a time we were facing trade pressure from the US and uncertainties in the global trade environment."

"The consensus is significant in that the South Korean investment in US projects is more than just the money transfer, as it will provide us with the opportunity for South Korean firms to enter the US market and expand industry cooperation there," Kwon said in a party meeting Thursday.

Opposition parties, however, claimed the government has failed to transparently deliver proceedings to the parliament over its US investment commitment decisions and negotiation processes.

In a joint statement, lawmakers of the main opposition People Power Party questioned figures linked to the Alaska LNG project and nuclear power plant construction project.

They claimed commitment figures to the two projects came without sufficient consensus with the National Assembly.

"In the report to the National Assembly regarding investment commitment to the US, the Alaska LNG project was described as one where a final decision on whether to proceed would need further review. If so, where exactly did the figure of $54 billion come from?" the statement read.

"Did the government already negotiate the specific investment scale with the US side while telling the National Assembly it was under review? Or did the US government unilaterally announce a figure to which our government had never agreed?"

Rep. Kim Sung-won of the People Power Party, who chairs the Trade, Industry, Energy, SMEs and Startups Committee, blasted President Lee Jae Myung for "deceiving South Korean people" over the US' revelation of the dollar figure for the Alaska project.

Minor Progressive Party lawmakers also said in a statement Thursday, "South Korea should never tolerate a humiliating situation where a national decision involving the injection of massive South Korean funds is reduced to a unilateral move by the US president to burnish his record ahead of the US midterm elections."

"The government must nullify this investment agreement with the US, which constitutes an infringement of sovereignty and an unequal deal," the statement also read.