South Korea is contemplating a significant $22.3 billion investment in a natural gas power project in Texas, marking the first major initiative under its extensive $350 billion pledge to the United States. The proposed development in Encinal aims to construct a 6.3-gigawatt gas-fired power plant, a response to the escalating electricity demand prompted by the swift growth of AI data centers and advanced semiconductor facilities in the region.
Initially, South Korea considered a $19.8 billion investment, whereas the United States sought around $25 billion. Through ongoing negotiations, the involved parties have reportedly reduced the disparity to approximately $22.3 billion. However, the final investment amount and the power plant’s generating capacity remain subject to change. The project is expected to unfold in phases, beginning with the addition of about 1.4 gigawatts of gas turbine capacity, followed by up to 4.9 gigawatts of combined-cycle generation, contingent on the electricity demand and economic conditions.
In addition to the natural gas project, South Korea and the United States are exploring the possibility of launching a substantial nuclear program. As part of this discussion, Washington has proposed designating up to $120 billion from the investment commitment to build as many as eight large nuclear reactors. These talks include the potential use of South Korea’s APR100 reactor design for two of these units.
The broader $350 billion commitment includes $200 billion for a range of US investments and another $150 billion specifically aimed at bolstering the US shipbuilding industry. Before finalizing these investment arrangements, South Korea is required to update its National Assembly. A memorandum outlining the investment framework could be signed by the two nations as early as September 18, although negotiations are still in progress. According to South Korea’s industry ministry, no definitive decisions have been reached regarding the Texas gas project or the proposed US nuclear initiative.