Korea expected to invest $22 billion in gas-fired plant in Texas as part of tariff deal

Last year, Korea pledged to invest US$200 in energy and cutting-edge technology in the US in exchange for a lower tariff rate

President Lee Jae Myung of South Korea and President Donald Trump of the US. (EPA/Yonhap)

Korea and the US are reportedly nearing an agreement on the first project to be funded as part of Seoul’s strategic investment in the US, with about US$22.3 billion expected to be invested in a gas-fired power plant in Encinal, Texas. While the two countries are eyeing Sept. 18 to sign a memorandum of understanding outlining the major points of Korea’s investment, the final agreement may also include other investment projects in the US, such as the construction of eight nuclear reactors and the Alaska LNG pipeline project. During a policy coordination meeting between the ruling Democratic Party and the administration held at the National Assembly’s Members’ Office Building on Monday, the Ministry of Trade, Industry and Resources and the Ministry of Finance and Economy presented progress on negotiations over Korea’s US$200 billion fund for strategic investments in energy and cutting-edge technology in the US, agreed upon in 2025 in exchange for favorable US tariffs. Democratic lawmakers serving on the parliamentary Strategy and Finance Committee and the Trade, Industry, Energy, SMEs and Startups Committee were in attendance. Several people who attended the meeting said that the Encinal combined-cycle gas-fired power plant, widely considered the leading target for Korea’s first investment, is expected to have a total cost of approximately US$22.3 billion. The final pact will reportedly include the building of eight nuclear reactors within the US. “I do not believe that the amount of capital needed for the eight nuclear reactors will be specified, but that the general direction of the project will be included in the agreement,” one person who attended the meeting said. The Alaska LNG project, which US President Donald Trump has pressed Korea and Japan to participate in, is also expected to be included. “We were notified that an underground tunnel project may be included,” a different participant relayed. “As the overall scale of the business appears to be rather large, the main point of contention is expected to be profitability,” noted another participant.By Kim Chae-woon, staff reporter; Seo Young-ji, staff reporter; Goh Gyoung-ju, staff reporterPlease direct questions or comments to [english@hani.co.kr]