South Korea and the US discuss a $350 billion investment package covering a Texas gas plant, nuclear reactors, Alaska LNG, nuclear fuel reprocessing and carbon capture projects as both sides finalise investment plans.
South Korea and the United States are discussing a series of energy projects as Seoul and Washington work to implement a $350 billion investment package linked to a trade agreement that reduced US tariffs on South Korean goods to 15%. The proposals include a large gas-fired power plant in Texas, nuclear reactors, an Alaska LNG project and other energy-related investments.
Of the overall investment commitment, $150 billion is earmarked for shipbuilding, while the remaining $200 billion is being considered for strategic investments. South Korean and US officials are continuing negotiations over the projects and their financing structures, and South Korea's industry ministry has indicated that specific details have not yet been finalised.
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One of the major projects under discussion is a 6.3-gigawatt combined-cycle gas power plant in Encinal, Texas. The project is intended to provide electricity for the state's growing demand from artificial intelligence data centres and semiconductor manufacturing facilities. Reports cited by Reuters indicate that the project could involve approximately $22.3 billion in investment.
The development could be implemented in stages, beginning with around 1.4 GW of gas turbine capacity, followed by an additional 4.9 GW of combined-cycle facilities. The two countries are also discussing the use of a bilateral special-purpose investment vehicle for the project.
Nuclear power is another major component of the discussions. Seoul and Washington are considering the construction of up to eight large nuclear reactors in the United States. At an estimated cost of about $15 billion per reactor, the projects could represent a substantial portion of the strategic investment allocation. Six reactors are being discussed with Westinghouse technology, while two could use South Korean technology. If constructed, the latter would be the first South Korean-designed reactors built in the United States.
South Korea is separately negotiating a possible stake in Westinghouse. Seoul has sought an approximately 15% holding, potentially accompanied by a board seat, while US negotiators have reportedly offered a smaller stake of between 5% and 10%. The eventual investment would depend partly on Westinghouse's valuation.
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Another proposal involves South Korean participation in the $44 billion Alaska LNG project, which would transport natural gas from northern Alaska through a roughly 1,300-km pipeline to Nikiski for export to Asian markets. Seoul has approached the project cautiously because of its commercial risks.
The investment discussions also include potential cooperation on spent nuclear fuel reprocessing and carbon capture, utilisation and storage (CCUS). South Korean officials have linked nuclear fuel discussions to Seoul's plans for nuclear-powered submarines.