South Korea may boost US LNG imports to address trade imbalances

South Korea and the US are expected to hold a video conference "in the next one or two days" to discuss cooperation on an LNG project in Alaska, acting President Han Duck-soo said April 14.

"The two countries would establish a negotiation system for all sectors and begin negotiations to produce specific content at an early date," he said, speaking during an economic security meeting attended by the economy and finance minister, the trade, industry and energy minister, as well as other top officials from the Ministry of Foreign Affairs and the Office for Government Policy Coordination.

Han, who is concurrently serving as the prime minister, also said that South Korea and the US have agreed to strengthen cooperation in the three main areas of shipbuilding, LNG and trade imbalances.

"Since the two countries have created positive momentum to continue discussions, we will make efforts to minimize the burden of tariffs by prioritizing trade negotiations with the US," he said.

The acting president added that President Donald Trump appeared to have instructed his administration to conduct "immediate" tariff negotiations with South Korea, Japan and India, noting that Seoul would be fully ready for talks with the US.

Han's remark came after he held a phone call with Trump on April 8, during which they discussed the LNG project in Alaska, shipbuilding and tariff issues, among other things.

Han has been serving as the country's acting president since President Yoon Suk-yeol was impeached and ousted from office on April 4.

"I believe President Trump agreed with our determination to faithfully conduct win-win negotiations," Han said, referring to his phone call with Trump.

Meanwhile, the state-run think tank Korea Institute for International Economic Policy has called for South Korea to increase its imports of LNG from the US to help address trade imbalances and ease tariff pressure from Trump.

US versus Qatar LNG

If South Korea purchases an additional 7 million mt/year of LNG from the US by replacing several term contracts with Qatar, the US reciprocal tariffs could be reduced to 23.6% from the current 25%, the KIEP said in a report issued April 10.

State-run Korea Gas Corp.'s term contract with RasGas Co. for 4.92 million mt/year of LNG, which began in 1999, expired in 2024. Additionally, Kogas's other term contract with RasGas for 2.1 million mt/year of LNG, which began in 2007, will expire in 2026, according to Kogas officials.

"This means Kogas needs new term contracts for 7.02 million mt/year to replace the Qatari volume, and American LNG could be an option, which may help address trade imbalances with the US," the KIEP report said.

South Korea imported 5.636 million mt of LNG from the US in 2024, up 10.2% year over year and accounting for 12.2% of the country's total imports of 46.318 million mt, according to data from the Korea Customs Service.

The US is South Korea's fourth-largest LNG supplier, after Australia, Qatar and Malaysia.

The 20-million-mt/year Alaska LNG project had struggled to gain traction for years amid the state's long-running challenges, including high project costs and difficulty securing customers. This led the state to shift its efforts toward turning the project over to private interests.

US-based Glenfarne, which signed a deal with the Alaskan government entity managing the proposed Alaska LNG export project, said on March 28 that it expects to reach a final investment decision in 2025 on a portion of an 800-mile pipeline that would connect Alaska North Slope supplies to the export terminal in Nikiski, located on the Kenai Peninsula in the southern part of the state.

Alaska Governor Mike Dunleavy, speaking in March at the CERAWeek energy conference by S&P Global in Houston, said he expects the LNG project to start up within five years, with interest from Japan, South Korea and Taiwan.