Korea selects Texas power plant as 1st US investment project

Korea has selected a natural gas-fired combined-cycle power plant in Encinal, Texas, as the first project under its $200 billion strategic investment commitment to the United States. It is also drawing up plans for two further projects related to the construction of eight nuclear reactors and an Alaska liquefied natural gas (LNG) project.

Industry Minister Kim Jung-kwan briefed the National Assembly's Trade, Industry, Energy, SMEs, and Startups Committee on the projects Tuesday, saying the government had decided on the first project following reviews by committees chaired by the industry and finance ministers.

“Today, I would like to report on one project the government has decided to pursue,” Kim said during the committee's plenary session.

The $22.3 billion project, with planned generating capacity of about 6.3 gigawatts, is aimed at meeting rising electricity demand in Texas as semiconductor plants and artificial intelligence data centers expand in the state.

The project will be funded entirely by Korea, while ownership will be split equally between Seoul and Washington.

The government estimates the project will generate about $43.29 billion to $45.43 billion over 20 years, enough to recover the principal and interest on the investment.

Under the agreement, Korea will make investment payments no earlier than 45 business days after being notified that the U.S. president has selected a project.

The Texas project is expected to start with a 1.4-gigawatt gas turbine facility to assess power demand and the project's commercial viability, before adding about 4.9 gigawatts of combined-cycle generating capacity in stages.

Kim added that the government had prepared implementation plans for two other projects that have not yet been approved but reflect shared interests between Korea and the U.S.

“Although we have not yet decided to pursue these projects specifically, I would like to report on the implementation plans for two projects that reflect the interests of both countries,” he said.

The two other projects under consideration are the construction of eight large nuclear reactors in the U.S. and an investment in the Alaska LNG project.

The nuclear project is being discussed on the basis of six Westinghouse AP1000 reactors and two South Korean-designed APR1400 reactors, although the reactor mix has not yet been agreed.

The U.S. side has been reluctant to include the Korean-designed reactors, and has also resisted Seoul’s push for a larger stake and greater management rights in Westinghouse.

Korea reportedly sought a roughly 20 percent stake in the company, but the minister shared that the two sides are now discussing a stake of 5 to 10 percent.

Kim said that even with a 5 to 10 percent stake, Korea would be able to secure voting rights in Westinghouse.

The minister said the government had identified projects that could benefit Korea and reviewed U.S.-proposed projects based on their commercial viability.

“The government has sought to take a balanced approach from the perspective of the national interest so that U.S. investment goes beyond simply putting in and recovering funds and instead becomes an opportunity for Korean companies to expand their presence in the U.S. market and use the United States as a stepping stone to global markets,” he said.

Both projects remain subject to negotiations over commercial viability and investment terms.

The briefing was held behind closed doors because it included sensitive details about the negotiations and investment terms.

U.S. President Donald Trump is expected to make the final announcement on the investment projects after the relevant U.S. review procedures are completed.

The government pledged $200 billion in strategic investment as part of a broader $350 billion U.S. investment package tied to a bilateral trade deal. The remaining $150 billion is earmarked for shipbuilding.

Kim reaffirmed that Korea’s strategic investment will not exceed the $200 billion ceiling, with annual funding capped at $20 billion under the investment framework.