South Korea is poised to make a substantial investment in the United States, with plans to pour $22.3 billion into a natural gas power project in Texas. This endeavor marks the first significant move under South Korea’s broader $350 billion commitment to U.S. ventures. The project, proposed for Encinal, aims to construct a 6.3-gigawatt gas-fired power plant. This development is driven by the increasing electricity demands stemming from the rapid growth of AI data centers and advanced semiconductor facilities in the region.
Initially, South Korean officials considered an investment of around $19.8 billion, while the U.S. side sought a higher figure of approximately $25 billion. Current negotiations have brought the anticipated investment closer to $22.3 billion, although the final amount and the project’s capacity could still be adjusted. The development is planned to occur in phases, with the first stage adding about 1.4 gigawatts of gas turbine capacity. Subsequent stages could introduce up to 4.9 gigawatts of combined-cycle generation, contingent upon the demand for electricity and prevailing economic conditions.
Beyond the gas project, discussions between South Korea and the U.S. are also exploring a potential large-scale nuclear program. The U.S. has proposed dedicating up to $120 billion from the investment package to construct as many as eight large nuclear reactors. These discussions include the possibility of employing South Korea’s APR100 reactor design for two of these units.
The $350 billion investment plan from South Korea comprises $200 billion earmarked for general U.S. investments and $150 billion specifically targeted at bolstering the American shipbuilding industry. Before finalizing these investment arrangements, Seoul must provide a briefing to its National Assembly. A memorandum detailing the investment framework could be signed by the two countries as early as September 18, although negotiations are still in progress. According to South Korea’s industry ministry, no final decisions have yet been made regarding the Texas gas project or the proposed nuclear program in the U.S.