By Curtis Williams
HOUSTON, Oct 1 (Reuters) - US President Donald Trump's push to steer $54 billion of South Korean investment into Alaska LNG is putting a fresh focus on a 20 million-ton-a-year export project that would cost more than twice as much as a comparable US Gulf Coast plant.
Trump unveiled the plan on Wednesday as part of a broader $200 billion South Korean package. Seoul quickly said it had not yet decided whether to fund Alaska LNG and would first review the project's commercial viability.
"The question is whether Asian buyers are willing to pay a premium in exchange for security of supply. So far, we have not seen evidence of that," said Jason Feer, head of business intelligence at Poten & Partners.
Lead developer Glenfarne Group estimates Alaska LNG will cost $44.5 billion to $54.5 billion. That works out to roughly $2.2 billion to $2.7 billion per million metric tons per annum of capacity, by far the highest of any US export project ever proposed.
By comparison, the wave of US LNG projects approved since Russia's invasion of Ukraine has generally been built at an average cost of about $1 billion per mtpa or less.
Cheniere Energy's Corpus Christi Stage 3 expansion was estimated to cost about $8 billion for 10.5 mtpa of additional capacity, or roughly $760 million per mtpa.
Venture Global's Plaquemines LNG project represented approximately $21 billion of investment for 20 mtpa, while NextDecade's Rio Grande LNG and Woodside Energy's Louisiana LNG are also near the $1 billion-per-mtpa threshold.
Gulf Coast export terminals tap extensive networks supplying shale gas from Texas, Louisiana and Appalachia. Alaska LNG would instead require an 800-mile (1,287-km) pipeline from the North Slope — a region in northern Alaska between the Brooks Range mountains and the Arctic Ocean — to Nikiski, estimated to cost $13.2 billion to $16.9 billion.
In addition to the pipeline, the project requires a large treatment plant on the North Slope before gas can be moved south for export. Glenfarne's latest estimates place the cost of the treatment facility at $7.7 billion to $9.2 billion and the liquefaction terminal itself at $23.6 billion to $28.4 billion.
Alex Munton, director of global gas and LNG research at Rapidan Energy Group, said the project "may not be able to meet commercial thresholds for investment."
Glenfarne did not immediately respond to a request for comment. On Wednesday, CEO Brendan Duval said Trump's announcement would help bring "together the capital needed to accelerate Alaska LNG to a final investment decision and construction."
Supporters say Alaska LNG's location offers a strategic advantage because cargoes would reach key Asian importers such as Japan, South Korea and Taiwan significantly faster than Gulf Coast shipments, lowering shipping costs.
"Asia needs stable, secure supplies of gas and for that they may be willing to pay a premium," said Jack Weixel at East Daley Analytics. He noted, however, that Canadian projects in the region could have advantages over Alaska LNG.
"These LNG developers should be looking at any and all options as the global market for natural gas, particularly among non-OECD nations, grows," he said. "But, some will work better than others."
(Reporting by Curtis Williams in Houston; Editing by Nathan Crooks and Bill Berkrot)
