Korea, U.S. Pick $22.3 Billion Texas LNG Plant as First Investment

WASHINGTON — South Korea and the United States have designated a $22.3 billion liquefied natural gas combined-cycle power plant in Texas as the first project under Seoul's strategic investment package in the U.S. The two sides also set up a framework for building eight large nuclear reactors in the U.S. On the Alaska LNG project, which the Korean government had said it would review before deciding whether to proceed, U.S. officials said Korea would commit more than $50 billion.

President Donald Trump announced the terms of the strategic investment agreement from the Oval Office at the White House on the 30th. "This enormous investment package we are announcing today is a major step forward in securing critical energy supply chains, cementing American energy dominance and making our partnership with Korea and the entire Pacific region stronger than ever," Trump said. "Under our trade deal with Korea, they agreed to invest hundreds of billions of dollars, and in return we cut tariffs to 15%."

The first project, called Project Star, involves building an LNG combined-cycle power plant in Encinal, Texas, to supply artificial intelligence data centers. Total project cost is $22.3 billion and generating capacity is 6,472 megawatts, with commercial operation of the first phase targeted for 2029.

The two countries also agreed on a Korea-U.S. nuclear framework covering construction of eight large reactors in the U.S. At least two of them will use the APR1400, a Korean-designed reactor. The initiative is named Project Power. A total of $120 billion will be drawn from the investment funds, including $100 billion in construction costs and $20 billion in contingency reserves. The two sides also discussed paying up to $10 billion by the end of this year to secure long-lead equipment needed for reactor construction, including reactor vessels, steam generators and reactor coolant pumps.

U.S. Commerce Secretary Howard Lutnick said the reactors would be built in Ohio, Tennessee, South Carolina and Kentucky. The Trump administration has been pursuing large reactor projects in those states, mainly on federally owned sites, to speed up construction.

The detailed business structure and construction timeline for the eight reactors have yet to be finalized. The two governments will flesh out the projects based on the framework, then decide whether to proceed after reviewing the commercial rationale of each project and completing National Assembly procedures.

Korean companies will also seek to acquire a stake in Westinghouse. Under the plan, the Korean side would obtain 5% to 10% of voting common shares during Westinghouse's initial public offering at a 10% discount to the offering price.

The two sides took subtly different positions on the Alaska LNG project. The Korean government said it had included the project, which it calls Project North, on its list of prospective U.S. investments, but that because commercial viability has not yet been established, the two countries agreed only to begin a review of the project.

Trump, by contrast, presented Korea's participation in the Alaska LNG project as settled, calling it "a tremendous victory for the people of Alaska." Lutnick said the investment would exceed $50 billion. Also present in the Oval Office for the announcement were Interior Secretary Doug Burgum, Energy Secretary Chris Wright and Republican Sen. Dan Sullivan of Alaska.

According to the Korean government, if the project moves ahead, the U.S. will grant tariff reductions on steel and other equipment, guarantee long-term LNG purchase contracts on economically viable terms and give Korea priority access to Alaska LNG.

The two countries also built in safeguards for recovering the investment. Even if an individual project recoups its principal and interest first, the profit-sharing ratio for that project will not immediately shift to 1-to-9. Instead, all projects will maintain a 50-50 split between Korea and the U.S. until Korea has recovered the full principal and interest on its total investment across all projects.