By Jarrett Renshaw and Trevor Hunnicutt
WASHINGTON, Sept 29 (Reuters) – President Donald Trump could unveil plans as soon as Wednesday to tap South Korea’s pledged strategic investment package for about $54 billion to build a liquefied natural gas facility in Alaska and several other major US projects, according to two people familiar with the discussions.
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The move would come as part of a flurry of economic and investment announcements ahead of November’s midterm elections, as Trump seeks to bolster his administration’s economic record to shore up voter support.
Trump’s overall approval rating sank to 32%, the lowest of his political career, according to a Reuters/Ipsos poll this month. Voters have expressed concern about the Iran war and high gasoline prices.
Alaska has become a central stage for Republicans battling to maintain control of the US Senate, with many analysts regarding the contest there between incumbent Republican Dan Sullivan and Democrat Mary Peltola as a toss-up.
A POTENTIAL SOURCE OF ENERGY FOR ASIA
The Alaska LNG project would include a pipeline to transport natural gas from the North Slope to a liquefaction facility on the state’s southern coast, where it could be shipped to Asian markets.
It would be the first such US project with direct access to Asia, the fastest-growing market for liquefied natural gas.
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 opposition lawmaker, told Reuters on Wednesday.
“The U.S. investments should be structured in a mutually beneficial way that creates opportunities for South Korean companies, expand markets, and secures stable energy energy supply chains,” said Kim of the People Power Party, briefed last week by South Korea’s industry ministry on the US plans.
Kim, who chairs the South Korean parliament’s trade committee, said the National Assembly would closely examine the profitability and fiscal risks of US investment projects, as well as tangible benefits for Korean companies.
South Korean analysts and investors see the projects are “unbelievably unfair” for its government and companies, as Seoul would have to make investments alone but share profits with the United States, an analyst in Seoul told Reuters on condition of anonymity as the issue is a sensitive one.
Japan’s two biggest LNG importers, JERA and Tokyo Gas, have signed preliminary deals to buy a combined 2 million metric tons a year from Alaska LNG should it be built.
Glenfarne, the project’s developer, said in March it had lined up commitments for 13 million tons a year. To line up financing, it needed agreements for another 3 million tons and to make all commitments binding, the company said.
Glenfarne could not immediately be reached for comment.
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, including in analysis by the South Korean and Japanese governments. Investment from Seoul would represent a potential source of financing for the project.
South Korean and US officials have been working to identify projects for the $350-billion strategic investment package that Seoul pledged under a trade deal last year. The two sides have discussed Alaska LNG, nuclear power and a gas-fired power project in Texas, among other potential investments.
South Korea’s embassy in Washington did not immediately respond to a request for comment.
Seoul and Washington have been close allies since the 1950-53 Korean War, but there have been tensions in recent months, with differences over trade and security cooperation and some sharp criticism of Seoul by Trump.
(Reporting by Jarrett Renshaw and Trevor Hunnicutt in Washington; Additional reporting by Curtis Williams, David Brunnstrom and Heejin Kim; Editing by Nathan Crooks, Sonali Paul and Clarence Fernandez)
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