Texas gas plant set as Korea’s first U.S. investment project

South Korea and the United States have designated a $22.3 billion gas-fired power plant in Texas as the first project under Seoul’s $200 billion U.S. strategic investment program.

The two countries released a joint fact sheet Thursday outlining plans for strategic investment projects.

“The announcement implements the Trade Deal between Korea and the United States, announced on July 30, 2025, and the Strategic Investment MOU signed on November 14 of that year,” the U.S. Department of Commerce said in a press release on Wednesday, local time. “These efforts aim to build stable and resilient supply chains by enhancing cooperation between Korea and the United States in strategic industrial sectors, including energy.”

Korea earlier pledged a total of $350 billion in investment in the U.S., including $150 billion in shipbuilding cooperation and $200 billion in strategic investment, in exchange for the U.S. lowering tariffs from 25 percent to 15 percent.

Of this amount, the strategic investment funds available under the fact sheet total $200 billion.

As the first project, the two countries confirmed a project to build and operate a 6.472-gigawatt (GW) gas combined-cycle power plant in the Encinal area of Texas for AI data centers.

The total project cost is $22.3 billion, with the first phase scheduled to begin commercial operations in 2029 and the entire facility to come online in stages by 2032.

The project will be led by global real estate developer Related Companies and power producer NextEra Energy, while Texas natural gas supplier Lewis Energy Group will provide infrastructure including the site, natural gas, and water.

The two countries agreed to expand the participation of Korean companies in power-generation equipment, engineering and construction, and long-term operations and maintenance.

In particular, the U.S. agreed to provide Korean companies with opportunities to supply Korean-made equipment, including turbines, for similar projects in the country.

The government plans for the project to generate revenue through a tolling-type power purchase agreement (PPA), under which the consumer bears the variable costs arising from power generation while the power plant receives a fixed fee based on its generating capacity.

Based on this revenue model, the government estimated that it could recover between $43 billion and $45 billion over the next 20 years.

Korea and the U.S. also agreed on a Korea-U.S. nuclear power framework for the construction of eight large-scale nuclear reactors in the U.S.

At least two of these reactors will be built using Korea’s APR1400 nuclear reactor design. A total of $120 billion will be invested from the U.S. investment fund, including $100 billion in construction costs and $20 billion in contingency funds.

The signatories are the governments of the two countries, Westinghouse Electric Co., Korea Electric Power Corp., and Korea Hydro & Nuclear Power Co.

The two countries also agreed to cooperate on a plan to provide $10 billion in advance by the end of the year to secure long-lead equipment needed for nuclear reactor construction. The equipment includes reactor vessels, steam generators, and reactor coolant pumps.

Korean companies will also pursue a minority equity investment in Westinghouse, with the specific terms to be finalized later.

“The stake is being coordinated at around 5 percent to 10 percent,” said Korean Trade Minister Kim Jung-kwan. “KEPCO and KHNP will participate at a symbolic level, taking their financial burden into consideration, while Korean private companies will also participate.”

U.S. Secretary of Commerce Howard Lutnick said the reactors would be built in Ohio, Tennessee, South Carolina, and Kentucky.

Regarding the Alaska LNG development project, the two countries revealed differences in their positions.

The two countries stated in the fact sheet that they “have agreed to commence working on the Alaska LNG project, subject to meeting commercial reasonableness under the Strategic Investment MOU and all applicable domestic legal requirements.”

However, U.S. President Donald Trump formally announced Korea’s participation in the Alaska LNG project on Wednesday.

Secretary Lutnick also mentioned that the related investment could exceed $50 billion.

Despite the two governments specifying “commercial reasonableness” as a condition for the project in the official document, Trump has treated Korea’s participation as a fait accompli, making it an important variable in future negotiations between Seoul and Washington.

According to the fact sheet, if the project moves forward, the U.S. side will “facilitate the favorable involvement of Korean vendors and suppliers.”

“The U.S. intends to provide assurances, to the extent possible, regarding offtake agreements at economically viable prices granting Korea priority access to Alaska LNG produced by this project,” it said.

The two countries also established safeguards for recovering the investment.

The 50-50 revenue-sharing arrangement will remain in place until Korea has fully recovered the total principal and interest on its investment in the entire project, and only after the principal and interest have been recovered will the U.S. side receive 90 percent of the revenue.

The investment limit was also put in writing.

Even if additional projects are added or project costs increase, the agreement specifies that the investment will not exceed $20 billion annually or $200 billion in total, as stipulated in the MOU, thereby blocking the possibility of additional funding being injected.