South Korea is eyeing a significant investment opportunity in Texas, with plans to initiate a $22.3 billion natural gas power project. This venture marks the first substantial move under South Korea’s ambitious $350 billion investment pledge to the United States. The proposed site for this development is Encinal, where a 6.3-gigawatt gas-fired power plant is envisioned. The project aims to address the increasing electricity demands stemming from the rapid growth of AI data centers and advanced semiconductor facilities across Texas.
Initial discussions had South Korea considering an investment around $19.8 billion, while U.S. expectations were closer to $25 billion. Recent negotiations have brought both parties closer to an agreement at approximately $22.3 billion, though the final investment amount and the plant’s generating capacity remain subject to change. The development plan involves a phased approach, beginning with the addition of about 1.4 gigawatts of gas turbine capacity. This would later be expanded by up to 4.9 gigawatts of combined-cycle generation, contingent on future electricity demand and prevailing economic conditions.
In addition to the Texas project, South Korea and the United States are exploring a possible collaboration on a large-scale nuclear program. The U.S. has suggested allocating as much as $120 billion from the investment package to construct up to eight large nuclear reactors. Discussions have touched on the potential use of South Korea’s APR100 reactor design for two of these units.
The broader $350 billion investment commitment includes $200 billion designated for general U.S. investments and another $150 billion focused on bolstering the U.S. shipbuilding industry. Before finalizing any agreements, South Korea is required to brief its National Assembly. The two nations might sign a memorandum establishing the investment framework as soon as September 18, though negotiations are ongoing. According to South Korea’s industry ministry, no conclusive decisions have been made yet regarding the Texas gas project or the proposed nuclear program in the United States.
