South Korea selects Texas power plant as first project of its $350 billion U.S. investment

South Korea has selected the construction of a large gas power plant in Texas as the first project within its massive U.S. investment program. The complex is estimated to cost around $22.3 billion, and its capacity is expected to reach about 6.3 GW.

It involves a combined cycle gas power plant in the Encinal area of South Texas. South Korea's Ministry of Trade, Industry and Energy presented the project to a parliamentary committee on September 22 as the first concrete investment under the agreements with the U.S.

The new generating capacity is intended primarily to meet the rapidly growing demand for electricity in Texas, where data centers for artificial intelligence and semiconductor manufacturing facilities are being actively built.

Under the current plan, approximately 1.4 GW of gas turbine generation will be built in the first phase. After verifying demand and economic feasibility, the project could be expanded by about 4.9 GW using combined cycle units.

The project is part of a much broader agreement between Seoul and Washington. South Korea has committed to providing $350 billion in U.S. investments in exchange for reduced American import tariffs. Of this amount, $150 billion is reserved for cooperation in shipbuilding, and another $200 billion for strategic investments in other sectors.

The Texas power plant will be the first project from this $200 billion strategic package. Seoul insists that investments must comply with the principle of commercial viability, and that annual funding should not exceed $20 billion.

The South Korean government considers the Texas project economically attractive, but final details of financing and ownership structure are still being coordinated with the U.S.

The power plant could be just the beginning of a major Korean expansion into the American energy sector. Seoul has named the construction of eight large nuclear power units in the U.S. as a second potential direction.

For this, South Korea is concurrently negotiating the acquisition of 5-10% of the American nuclear company Westinghouse. According to information presented by the government to parliament, even such a minority stake should include voting rights.

A third major project could be the development of LNG infrastructure in Alaska. Unlike the Texas power plant, final investment decisions on the nuclear and Alaskan projects have not yet been made.

Thus, energy is becoming one of the main areas for realizing the Korean investment package in the U.S. Amid the rapid development of AI and data centers, the American power grid requires a significant increase in generation, creating opportunities for Korean energy, construction, and industrial companies.

Sources: Yonhap, Korea JoongAng Daily, KBS World