Korea picks Texas gas plant as first project in $200 billion U.S. investment package

Korea has selected a $22.3 billion combined-cycle gas power plant project in Encinal, Texas, as the first project under its $200 billion investment package for the United States.

Minister of Trade, Industry and Resources Kim Jung-kwan made the report at the National Assembly's Trade, Industry, Energy, SMEs and Startups Committee on Tuesday, citing the determination that the project is commercially sound, with projected earnings of $43 billion to $45 billion over 20 years.

The two other projects — the construction of eight nuclear reactors in the United States and a liquefied natural gas (LNG) development project in Alaska — have been discussed in broad terms, but no final investment decision has been made, with negotiations still underway.

The government concluded that the project appears commercially viable, citing the potential to earn up to $45 billion over 20 years on the strength of surging data center and AI-driven demand in the surrounding Texas region.

The plant, expected to reach a capacity of roughly 6.3 gigawatts, is intended to supply power to the state, where demand is expected to nearly double by 2032 amid a wave of new semiconductor factories and AI data centers.

Construction would begin with a 1.4-gigawatt gas turbine facility to test demand and economic feasibility, followed by a phased build-out to 4.9 gigawatts of combined-cycle capacity. The project will be led by Related Companies, the ninth-largest real estate developer globally, and NextEra Energy, the largest U.S. power operator, with land, gas and water infrastructure provided by Lewis Energy Group, the state's fifth-largest natural gas supplier.

The first phase of commercial operations has a target of 2029, with full capacity by 2032. Korea would finance the plant entirely, while Washington is reportedly pushing for a 50:50 equity split.

However, opposition lawmakers from the People Power Party (PPP) raised concerns that no power purchase agreement with the United States has been secured, calling into question the profitability.

"For this to be profitable, someone has to actually buy the electricity being produced. So who is going to build the data centers in Texas, and does that company have sufficient experience building data centers of that kind?" a PPP committee member said. 

Korea and the United States are still haggling over nuclear plant and Alaska LNG projects.

Seoul had initially sought a 20 percent stake in Westinghouse Electric, the Pennsylvania-based nuclear firm, including a seat on the board, which the United States balked at.

Minister Kim said talks are now centered on a 5 to 10 percent stake, though whether that figure would cover voting rights has not been disclosed.

Separately, discussions continue on building eight new reactors for roughly $120 billion — six using Westinghouse's AP1000 design and two using Korea's own APR1400 model.

Should that proceed, it would mark the first foreign reactor design on U.S. soil, a milestone previously blocked by Westinghouse's intellectual property claims over the APR1400.

Under the tariff agreement reached last year, Washington lowered the duties on Korean goods to 15 percent from 25 percent in exchange for $350 billion in Korean investments. 

Of that, $150 billion is earmarked for shipbuilding and $200 billion for strategic sectors, invested at up to $20 billion a year, with projects chosen on commercial viability. Profits would be split evenly until the investment principal and interest are recovered, after which the United States would take 90 percent.

BY SARAH CHEA, KIM NA-HAN   [[email protected]]