Korea Faces the Alaska LNG Bill While Japan Quietly Smiles: Risk or Opportunity? (Kwon Hyo-jae, COR Energy Insight)
An independent exercise, not a statement by the video creator or verification of every claim in the video.
How much extra could supply security justify?
Compare hypothetical prices with identical timing and delivered terms. If alternative LNG costs USD 12 per MMBtu normally and USD 30 during disruption, and p is the share exposed to disruption, its simple average cost is 12 + 18p. Assume a separate contract actually delivers the same volume at USD 14 in every scenario. The break-even disruption share is (14 − 12) ÷ (30 − 12), approximately 11.11%. Above that share, the contract is cheaper on average under these assumptions. A price ceiling without protection against nondelivery does not support the same calculation.
Check for yourself
- Do both prices include transport, liquefaction and insurance on the same delivered basis?
- Does the cap cover only feedgas, or also cost overruns and financing changes?
- Who pays for replacement supply under delay, force majeure and minimum-purchase obligations?
Limits of application
This uses hypothetical prices, equal volumes and a simple average, not actual disruption probabilities or a confirmed Alaska LNG price. Discounting, delays, excess purchases, counterparty default, correlated supply failures and national-security benefits are excluded.
- What to look for
- See why national strategic benefits, developer returns and buyers’ procurement costs are different tests of the same LNG project.
- Why it matters
- Calculate the extra cost of supply security, examine what a price cap covers and identify who bears overruns and delays when comparing participation options.
Timeline
9 segmentsThe guest proposes studying project data before negotiating volumes and a price ceiling without taking equity. This is a negotiating idea rather than an agreed contract; a meaningful cap must define covered costs, duration, overruns, delays and termination. Actual Korean and Japanese review work and private proposals need separate verification.