The U.S. government has reportedly asked Alaska to ease property tax burdens during negotiations for participation in a liquefied natural gas (LNG) project. This move aims to reduce the anticipated annual tax burden, which could reach up to 1 trillion KRW (about 750 million USD), to ensure the project’s viability.
On Friday, government and industry sources revealed that the Ministry of Trade, Industry, and Energy recently conveyed the need to alleviate property tax burdens during talks with U.S. officials about the Alaska LNG project.
Current Alaska state law imposes a 2% annual property tax on gas pipelines and processing facilities based on their assessed value. Alaska’s revenue authorities project that when the LNG project becomes operational in 2033, the annual property tax could amount to approximately 740 million USD.
The government believes that reducing the property tax burden could improve the project’s profitability. Given the anticipated costs of major investments, securing favorable conditions such as tax incentives is expected to be crucial in determining participation.
However, the government has not yet committed to the project. While U.S. officials have made statements implying Korea’s involvement is certain, the government maintains it is thoroughly evaluating commercial viability and compliance with domestic legal procedures.
President Donald Trump has been urging Korea to join the Alaska LNG project as the midterm elections approach. During a visit to Wasilla, Alaska, on Tuesday, Trump claimed that Taiwan would invest an additional 4.4 billion USD in the project, on top of the 50 billion USD he said Korea had already committed.
The Alaska LNG project involves transporting natural gas from northern Alaska gas fields through an 807-mile pipeline, liquefying it, and exporting it to Asian markets. U.S. officials estimate the total project cost at around 50 billion USD.
A spokesperson for the Ministry of Trade, Industry, and Energy stated that they’re in ongoing communication with U.S. officials, but added that it cannot disclose the specifics of the negotiations.
