South Korea Names $22.3 Billion Texas Gas Plant as First Project in $350 Billion US Investment Deal

South Korea confirmed on Tuesday, September 22, that a 6.3-gigawatt gas-fired power plant in Encinal, Texas, will be the first project under its $350 billion investment commitment to the United States, according to Reuters and lawmaker Chung Chin-ook, who spoke to reporters after a closed-door parliamentary briefing.

Industry Minister Kim Jung-kwan told lawmakers the project is valued at $22.3 billion, according to Yonhap News Agency as reported by Investment Monitor AI. The plant is designed to feed power-hungry AI data centers and semiconductor plants across Texas.

Seoul's government projects the plant could generate up to $45.4 billion in revenue over 20 years, enough to cover principal and interest, per the same Yonhap-sourced briefing. Whether it holds up is another question.

The Viability Problem

President Lee Jae Myung said last Friday that commercial viability has become a real sticking point as negotiators move from a broad handshake agreement to actual project-by-project terms, according to Reuters. Seoul has pushed to keep language in the deal requiring investments be "commercially reasonable," not just politically convenient.

South Korean opposition lawmakers are making this concern loudly. Business Times Singapore reported that opposition members are demanding closer parliamentary scrutiny, warning Seoul could be exposed to disproportionate financial risk on energy projects that may never turn a profit for Korean taxpayers.

Under South Korea's law governing the deal, the government only needs to brief lawmakers on projects it deems commercially reasonable. Projects pursued purely for national-security or supply-chain reasons, despite weak economics, require actual parliamentary consent.

Kim Jung-kwan told lawmakers no investment will proceed if the total package exceeds a $200 billion ceiling, Investment Monitor AI reported. He gave no firm date for signing a memorandum of understanding on the Texas plant, though one committee member told reporters the MOU is likely to be announced by Trump at a politically opportune moment before the U.S. midterm elections in November.

Nuclear and Westinghouse Still Stuck

Beyond Texas, Seoul is weighing two more projects. One involves two South Korean-designed APR1400 nuclear reactors as part of a larger plan to build eight large reactors in the U.S., six of them using Westinghouse's AP1000 design, according to a source cited by Reuters.

South Korea also wants a stake in Westinghouse itself. It originally sought around 20%, but U.S. officials pushed back, according to Investment Monitor AI. The two sides are now discussing 5% to 10%, which Kim Jung-kwan said would still secure voting rights.

A decision on joining the long-delayed Alaska LNG project hasn't been made at all.

Hyun Jung Je, a Washington-based senior fellow at the Korea Economic Institute of America, told Reuters the Texas announcement "would be a meaningful initial step" but cautioned that "the deal will need to be judged by its implementation and results, rather than the commitment itself."

Trump and Lee Meet at the UN

Hours after the Seoul briefing, Trump and Lee held an unannounced 30-minute bilateral meeting during a UN dinner reception in New York on Tuesday evening, according to Korea JoongAng Daily. National Security Adviser Wi Sung-lac told reporters both leaders "welcomed the significant progress made in recent discussions regarding investment projects."

The two also discussed nuclear submarines, uranium enrichment rights, spent fuel reprocessing, shipbuilding cooperation, and the transfer of wartime operational control from the U.S. to South Korea, per Wi's briefing reported by both JoongAng Daily and KFGO. Trump reaffirmed he's open to talks with North Korea's Kim Jong-un. The Strait of Hormuz troop deployment issue didn't come up, a senior presidential official said, calling it a natural gap in conversation rather than a deliberate omission.

This comes after Trump threatened South Korea with higher tariffs earlier this year over what U.S. officials called a slow pace of implementation compared to Japan, and after friction over Seoul's response to the Iran war and treatment of U.S.-listed Coupang, according to Reuters.

An Open Question in Texas Itself

The Encinal plant exists to power AI data centers. But Texas Governor Greg Abbott has ordered a halt to all environmental permits tied to new data center construction statewide, according to Breitbart, deepening a broader pause on AI infrastructure buildout in Texas. Whether that freeze affects the specific customer base the Encinal plant is banking on to hit its $45.4 billion revenue target is a question neither Seoul nor Washington has publicly addressed.