South Korea's US investment package takes shape with Texas power plant, nuclear projects

By Joyce Lee and Kyu-seok Shim

Sept 22 (Reuters) - South Korea and the United States are finalising implementation of Seoul's pledged $350 billion investment package under a trade deal struck last year that lowered US tariffs on South Korean goods to 15%.

Out of the $350 billion, $150 billion is earmarked for shipbuilding, with details still being worked out for the remaining $200 billion in strategic investments.

South Korea's industry ministry told lawmakers on Tuesday that President Donald Trump is expected to make a final announcement, with the plan still requiring review by a US government investment committee and further negotiations with US Commerce Secretary Howard Lutnick.

Below are details of the projects under discussion, according to media reports and South Korean lawmakers.

TEXAS GAS-FIRED POWER PLANT

The first identified project under the investment package is a more than 6-gigawatt combined-cycle gas power plant in Encinal, Texas, to supply electricity to AI data centres and semiconductor plants.

South Korea's industry ministry said that Seoul plans to invest more than $20 billion in the project, which is expected to generate returns of about $43 billion to $45 billion over roughly 20 years, lawmakers said.

According to the Yonhap News Agency, the industry ministry told lawmakers that South Korea would provide all funding for the project while ownership would initially be split equally between the countries.

US officials are seeking a long-term ownership structure under which the US side would hold a 90% stake and the South Korean side 10%, according to a lawmaker cited by Yonhap.

Lawmakers said the project was the first confirmed under the broader investment package.

EIGHT NUCLEAR REACTORS, WESTINGHOUSE STAKE

Seoul and Washington are discussing the construction of up to eight large nuclear reactors in the United States.

At about $15 billion per reactor, the nuclear sector could account for a significant portion of the investment package, according to Korea Economic Daily and other media outlets.

Lawmakers briefed by the industry ministry said current discussions envisage six reactors using Westinghouse's AP1000 technology and two using South Korea's APR1400 design.

If built, the APR1400 units would be the first South Korean-designed reactors in the United States.

Separately, Seoul is negotiating to acquire a stake in US nuclear company Westinghouse.

Lawmakers said discussions on a 5% to 10% stake remain ongoing. The industry ministry told lawmakers that South Korea would retain voting rights even with a stake of that size in Westinghouse, according to Yonhap.

The value of the investment would depend on Westinghouse's valuation ahead of a planned initial public offering, but could amount to $15 billion to $20 billion, implying a 15% stake could be worth $2.25 billion to $3 billion, according to Korea Economic Daily.

Westinghouse's equity is currently held by Canadian asset manager Brookfield and its partners with 51% and Canadian uranium miner Cameco with 49%.

ALASKA LNG PROJECT

Another project under discussion is South Korean participation in the Alaska liquefied natural gas project, a long-stalled pipeline and export scheme championed by Trump.

The Alaska LNG development, estimated to be worth $50 billion, would transport gas drilled from northern Alaska via a 1,300-km (807-mile) pipeline to Nikiski for export to Asian countries.

South Korea has approached the plan cautiously, and Industry Minister Kim told parliament last November that Alaska LNG was a "high-risk business".

South Korean media has said Seoul has sought to include the project in the investment memorandum without a binding commitment.

Lawmakers said participation remains under discussion and no decision has been made.

OTHER POTENTIAL INVESTMENTS

Another potential investment concerns Washington seeking South Korean support on reprocessing spent nuclear fuel, according to ruling party lawmaker Yoon Hu-duk.

Washington has proposed a project involving processing 4,000 tons of spent nuclear fuel, the lawmaker said.

The US is linking this to South Korea's push to build nuclear-powered submarines and secure fuel, Yonhap said.

At a leaders' summit last November, the two countries agreed on a joint factsheet in which Washington approved South Korean plans to build a nuclear-powered submarine and to work closely with Seoul on fuel procurement.

Another potential project involves carbon capture, utilisation and storage (CCUS), according to Yoon.

This is an area where major US energy firms have already attracted large-scale investment.