Key facts
- South Korea and the US are finalizing a $350 billion investment package.
- The package aims to lower US tariffs on South Korean goods.
- Discussions include a 6.3 GW gas-fired power plant in Texas for AI data centers.
- Up to eight large nuclear reactors are under discussion for construction in the US.
- South Korea is negotiating to acquire a stake in US nuclear company Westinghouse.
- Participation in the Alaska LNG project is also being discussed.
South Korea and the United States are in the final stages of implementing a $350 billion investment package agreed upon last year, which is intended to reduce US tariffs on South Korean goods. While $150 billion is allocated for shipbuilding, the remaining $200 billion is designated for strategic investments, the details of which are still being finalized.
Key projects under discussion include a 6.3-gigawatt combined-cycle gas power plant in Encinal, Texas, designed to supply electricity to AI data centers and semiconductor plants. This project is expected to be developed in phases, starting with 1.4 GW of gas turbine facilities, followed by 4.9 GW of combined-cycle facilities, with an agreed investment of approximately $22.3 billion.
Discussions also involve the potential construction of up to eight large nuclear reactors in the US, with an estimated cost of $15 billion per reactor. Six reactors would use technology from US company Westinghouse, while two would utilize a South Korean design, marking the first Korean-designed reactors in the US if built. Concurrently, South Korea is negotiating to acquire a 15% stake in Westinghouse, seeking a board seat, though the US has offered a 5% to 10% stake. The value of this investment could range from $15 billion to $20 billion, implying a 15% stake could be worth $2.25 billion to $3 billion.
Another project being considered is South Korean participation in the Alaska liquefied natural gas project, a $44 billion scheme to transport gas via pipeline for export to Asian countries. South Korea has approached this project cautiously, with the Industry Minister describing it as a "high-risk business."
Additionally, Washington is seeking South Korean support for reprocessing spent nuclear fuel, a proposal linked to South Korea's ambition to build nuclear-powered submarines and secure fuel. The US has proposed a project involving the processing of 4,000 tons of spent nuclear fuel. Carbon capture, utilization, and storage (CCUS) is also being explored as a potential investment area.