South Korea has identified a $22 billion gas-fired power project in Encinal, Texas, as the first US investment under last year's trade deal, local media reported. The selection could ease tension with Washington over the pace of Seoul's $350 billion pledge, though a dispute over the total investment ceiling has already surfaced.
South Korea has identified a gas-fired power project in Texas as the first US investment under a trade deal agreed last year, local media reported. The step could ease tension between the two allies after months of friction over the pace of Seoul's commitments.
A 6.3-gigawatt project in Encinal
The project in Encinal, Texas carries an investment of around $22 billion and would reach a total capacity of 6.3 gigawatts, Yonhap News and other Korean media outlets reported. It would start with 1.4 GW of gas-turbine generation before adding 4.9 GW of combined-cycle capacity, and would help meet surging electricity demand from artificial-intelligence data centers.
South Korea's government has refrained from disclosing project details and said Monday it won't announce anything until it finishes reporting to the National Assembly. Media reports said the administration will brief parliament on the investment negotiations on Sept. 17 and may sign an MOU as soon as Sept. 18.
Tariff pressure drove the timeline
The expected signing comes nearly a year after the two countries struck an initial trade deal that set US tariffs on South Korean exports at 15%. Seoul pledged to invest $350 billion in the US as part of the agreement, but delays in identifying the first project drew criticism from President Donald Trump, who threatened to raise tariffs on Korean goods to as high as 25%.
Mason Richey, a professor of international relations at Hankuk University of Foreign Studies, said the project could remove a persistent source of friction with Washington but won't produce larger structural changes, since Trump will likely seek further concessions later.
A dispute over the investment ceiling
In a last-minute twist, the US had asked South Korea to submit investment projects whose combined value exceeds the previously agreed $350 billion, Yonhap reported, citing unidentified parliamentary officials. Seoul is reportedly in talks with the US to ensure its actual commitment doesn't exceed $350 billion.
According to Rigzone, South Korea's Industry Ministry denied part of the Yonhap report late Tuesday: "It is not true that the US side has requested investments exceeding $350 billion." The ministry said total investment in the US will not exceed $200 billion under any circumstances, with an annual remittance limit of $20 billion, adding that the scale and timing of the initial remittance haven't been confirmed. Other proposals under consideration include eight large nuclear reactors and an Alaska LNG project, Yonhap added.
Japan has moved faster on a similar $550 billion pledge, with its first batch of projects covering $36 billion in US oil, gas and critical-minerals investment, including a natural gas facility in Ohio. A second Japanese group calls for $73 billion in a nuclear project spanning Tennessee and Alabama and gas power plants in Pennsylvania and Texas.
Source: Rigzone
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