Kim Jeong-kwan, the Minister of Trade, Industry and Energy, reiterated that 'commercial rationality' is the core principle of South Korea's strategic investment projects in the United States. He noted that the first confirmed project has been deemed viable based on local due diligence, while the Alaska liquefied natural gas (LNG) project has not yet reached the investment confirmation stage. However, he acknowledged that the strategic value of the project has increased in light of energy security concerns following the recent Middle East conflict.
During a National Assembly audit on October 6, Kim stated, "Our primary criterion is commercial rationality," adding that this principle is reflected in both negotiations with the U.S. and the U.S. investment law.
He emphasized that unlike Japan, South Korea's investment framework explicitly includes commercial rationality. "Japan does not mention commercial rationality in its project selection criteria, but we are required to consider it when choosing projects under our memorandum of understanding (MOU)," he explained. "Our law is fundamentally based on commercial rationality."
Regarding the already confirmed first project, Kim indicated that substantial feasibility assessments have been completed. He stated, "We have conducted local due diligence, examining whether gas can be supplied adequately, if there is sufficient power demand, and whether the developers and operators involved are reliable. Considering these factors, we believe the first project is commercially rational."
Kim confirmed that the same criteria will apply to the second and third projects to be selected in the future, stating, "We will carefully evaluate each project based on commercial rationality."
As for the Alaska LNG project, he maintained that a decision on investment has not yet been made. When Democratic Party lawmaker Jeong Jin-wook referenced President Donald Trump's mention of a $50 billion investment in Alaska LNG, Kim replied, "Not yet."
However, he noted that the government's assessment of the project has evolved over time. In response to a question from People Power Party lawmaker Choi Soo-jin, he acknowledged, "It is true that the project's feasibility has been low in the past, but the Middle East conflict has clearly added a new strategic value to Alaska LNG."
Kim identified the instability of energy supply chains due to worsening conditions in the Middle East as a key factor influencing the Alaska LNG project. He explained, "It is difficult to import LNG from the Middle East, and U.S. Gulf Coast supplies must navigate around Cape Horn instead of through the Panama Canal. If the Alaska project succeeds and we can secure LNG, we believe it will have significant strategic value."
He added, however, that the initiation of reviews does not imply a commitment to investment, emphasizing that it is still based on commercial rationality.
Kim also highlighted the importance of managing U.S.-Korea agreements amid rapidly changing trade environments. He cited Canada's recent import ban as a significant shock to trade authorities, stressing the need for stable management of trade relations in an environment where such measures could be reinstated at any time.
During the same National Assembly audit, there was also a debate regarding the Honam semiconductor cluster. Opposition lawmakers questioned whether the government had effectively predetermined the location and pressured companies to invest. Kim responded, "Companies needed production sites, and the government made proposals, but the final decision was made by the companies," distancing himself from claims that the government forced the location.
On the same day, the Climate, Energy, Environment, and Labor Committee also discussed the feasibility of power and water supply. Minister of Climate, Energy, and Environment Kim Sung-hwan stated, based on expert reviews and assessments from Korea Electric Power Corporation, "The 4GW semiconductor plant currently being built in Honam can be adequately supplied with power generated in the region." Regarding water supply, he projected, "A water supply of 650,000 tons is a feasible scale considering the new industrial demand in Honam."
He added, "In the long term, the policy is to ensure that power generated locally is used locally, allowing Honam to utilize the electricity that has previously been used in the metropolitan area."
* This article has been translated by AI.
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