Seoul, Washington formalize plans for three U.S. investment projects in joint statement
The two sides outlined investment plans expected to top $200 billion in a move widely considered a concession on Korea’s part.
Alaska Gov. Mike Dunleavy, left in front, speaks with U.S. President Donald Trump during an announcement on energy investment in Alaska, in the Oval Office of the White House in Washington on Sept. 30.
AFP/YONHAP
Korea and the United States formalized plans for investment in an Alaskan liquefied natural gas (LNG) project in a joint announcement Thursday, a move widely seen as a concession by Seoul after it had questioned the project’s commercial viability.
In the statement jointly issued by the U.S. Commerce Department and Korea’s Ministry of Trade, Industry and Resources, the two countries agreed to begin a review of the energy initiative that U.S. Commerce Secretary Howard Lutnick expects Korea to contribute over $50 billion to.
"The United States and Korea 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," the statement read, referring to the memorandum of understanding signed in November of last year that outlined a $350 billion investment pledge from Seoul in exchange for lower U.S. tariffs on Korean goods at 15 percent, down from 25 percent.
Washington also gave nonbinding assurance that it plans to give Korea priority access and competitive pricing on LNG from the Alaska project.
The statement also covers $22.3 billion in Korean investment in a gas-fired power plant in Encinal, Texas, and up to $120 billion for eight nuclear reactors in the United States.
The Texas plant is the furthest along of all the projects. Phase 1 is due to begin commercial operation in 2028, with the 6.3-gigawatt facility reaching full operating capacity in stages by 2032.
"In addition, the United States, in good faith, intends to provide Korean companies the opportunity to supply Korean equipment, including turbines, to other similar projects in the United States," the statement said.
Industry Minister Kim Jung-kwan expects a return on the plant of at least 15 percent, potentially yielding $45 billion over 20 years.
The nuclear power project could give Korean companies their first opening into the U.S. reactor market. Of the $120 billion, $100 billion is for construction and $20 billion is a contingency reserve. Seoul and Washington will also work to transfer a $10 billion advance payment by the end of the year, subject to each side's legal requirements, mainly to buy long-lead items.
"Through this initiative, both sides intend to contribute to the goal set forth in the U.S. Nuclear Energy Executive Order [May 2025] of having 10 new large reactors with complete designs under construction by 2030," the joint statement said.
Korean companies will also pursue a minority stake in Westinghouse to share in the commercial gains from large reactor projects.
"Potential investment in a significant minority interest in [Westinghouse] by Korean companies will be pursued," the statement said. "This arrangement is intended to facilitate the sharing of commercial gains from large-scale nuclear power plant projects, with the detailed terms and conditions to be finalized through commercial negotiations."
BY PARK EUN-JEE, LEE JAE-LIM [[email protected]]
