POSCO International Corp. is tipped to become the first South Korean company to join the $45 billion Alaska liquefied natural gas (LNG) project following reports that it has signed a tentative LNG supply agreement with Glenfarne Group, a US company that leads the LNG initiative.
Under the agreement, the general trading and energy exploration company would buy 1 million tons of LNG annually for 20 years from Glenfarne.
Additionally, POSCO Holdings Inc., the country’s largest steelmaker, may supply steel products for the construction of a 1,300-kilometer pipeline that will connect Alaska’s North Slope gas reserves to an export terminal in the south.
The deal was announced during the Gastech Exhibition & Conference 2025 held in Milan, Italy this week, according to foreign media outlets.
It marked the first agreement signed by a South Korean company to participate in the Alaska LNG project.
POSCO International is also said to consider an offtake arrangement for LNG purchases, under which it would secure supply rights prior to the start of production.
SUBJECT TO FURTHER INTERNAL REVIEW
However, POSCO International clarified the agreement signed with Glenfarne is a non-binding letter of intent.
“Our participation in the project will be determined through internal decision-making processes, including board approval, once we are confident in its business feasibility and profitability,” said a POSCO International official.
Its possible participation in the $45 billion LNG project may align with its ambition to advance into the US LNG terminal business.
BREAKTHROUGH IN DEADLOCK?
Albeit tentative, the deal is expected to serve as a breakthrough in the stalled trade negotiations between Seoul and Washington.
South Korea has yet to finalize a tariff deal with the US, signed in July, amid disputes over the structure and operation of a $350 billion US investment fund pledged by Seoul.
The fund, including a $150 billion commitment to rejuvenating the US shipbuilding sector, was central to their tariff agreement.
Beyond the trade talks, US President Donald Trump has broadened the space of bilateral cooperation to include the Alaska LNG project, adding that Seoul is a potential customer of the LNG to be drilled in Alaska.
The project, first proposed about a decade ago, initially involved major US energy companies such as ExxonMobil. However, it has remained stalled since they withdrew due to massive investment costs and high business risks.
The project gained renewed momentum after Trump signed an executive order to support the development and production of Alaska’s natural resources. Since then, the country has actively sought international investors.
South Korea has proposed forming a consortium with Japan, Taiwan and Vietnam to jointly assess the business feasibility of the Alaska LNG initiative before committing any investment.
Meanwhile, Japan finalized its trade deal last week with the US, committing $550 billion to a US-managed fund, which includes investments in building LNG pipelines in Alaska.
By Ok-Hee Ahn
ahnoh05@hankyung.com
Yeonhee Kim edited this article.
