South Korea has chosen to construct a gas combined cycle power plant in the Encinada region of Texas as its first strategic investment project in the United States. The government believes that operating the plant over a long period will allow for the recovery of the investment. Subsequent projects will include discussions on building nuclear power plants in the U.S. and developing liquefied natural gas (LNG) in Alaska.
On September 22, Kim Jeong-kwan, Minister of Trade, Industry and Energy, reported on the progress of U.S. investment negotiations and the project plans during a meeting of the National Assembly's Committee on Trade, Industry, Small and Medium Enterprises. On the same day, Deputy Prime Minister and Minister of Economy and Finance Lee Hyeong-il also provided a related report at a meeting of the National Assembly's Committee on Economy and Finance.
Minister Kim stated, "I will report on one project that the government has decided to pursue through the project management committee, chaired by the Minister of Industry, and the operation committee, chaired by the Minister of Economy and Finance. While this is not a project with a definitive implementation decision, I will also report on plans for two projects that reflect the interests of both countries."
Last year, South Korea and the U.S. agreed to a $350 billion investment deal, which included reducing U.S. tariffs from 25% to 15% and committing $150 billion in shipbuilding and $200 billion in strategic investments. The strategic investment also set an annual cap of $20 billion.
The first project involves constructing a gas combined cycle power plant in Texas to meet the increasing local electricity demand driven by AI data centers. The plan is to initially establish gas turbine power generation facilities with a capacity of 1.4 gigawatts (GW) and then gradually expand the combined cycle facilities. The government has reportedly assessed that it can recover approximately $43 billion to $45 billion over 20 years after investing $22.3 billion.
Future projects under discussion include the construction of eight large nuclear power plants in the U.S. and LNG development in Alaska. In the nuclear sector, discussions are ongoing about securing a 5% to 10% stake in Westinghouse to gain voting rights. However, both projects require further negotiations on specific investment conditions between South Korea and the U.S.
The government has emphasized the commercial viability of U.S. investments while considering the benefits for domestic companies entering overseas markets. Minister Kim remarked, "The government has been actively negotiating with the U.S. to pursue commercially viable projects. U.S. investments should not only be about capital input and recovery but also serve as an opportunity to expand our companies' entry into the U.S. market and lay the groundwork for entering global markets from a national interest perspective."
Additionally, it was reaffirmed that the scale of strategic investments in the U.S. should not exceed an annual limit of $20 billion and a total cap of $200 billion. Specific details of the negotiations and investment conditions were reported confidentially, considering diplomatic relations and corporate trade secrets. Minister Kim stated, "The government will prioritize national interests and will closely monitor U.S. investment projects while ensuring that necessary follow-up procedures are carried out without delay."
* This article has been translated by AI.
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