Ministry of Trade, Industry and Energy briefs ruling party in closed-door session

Encinal project — a 6.3 GW gas-fired plant — agreed at $22 billion

Samsung Electronics, SK hynix memory chip factories excluded; MOU signing eyed for Sept. 18

Oh Ki-hyung, a Democratic Party of Korea lawmaker who leads his party's side on the National Assembly's Finance and Economy Planning Committee, arrives Monday at a closed-door ruling party-government meeting held at the National Assembly members' office building to discuss US investment negotiations. The session was jointly convened by the Finance and Economy Planning Committee and the Trade, Industry, Small and Medium Enterprises Committee. [Yonhap]
Oh Ki-hyung, a Democratic Party of Korea lawmaker who leads his party's side on the National Assembly's Finance and Economy Planning Committee, arrives Monday at a closed-door ruling party-government meeting held at the National Assembly members' office building to discuss US investment negotiations. The session was jointly convened by the Finance and Economy Planning Committee and the Trade, Industry, Small and Medium Enterprises Committee. [Yonhap]

A gas-fired combined-cycle power plant in Encinal, Texas, is emerging as the leading candidate for the first project under the $350 billion US investment package agreed between South Korea and the United States. Final negotiations are also under way on a follow-on plan to build up to eight large nuclear power plants on American soil.

The Ministry of Trade, Industry and Energy briefed ruling Democratic Party of Korea lawmakers on the details Monday at a closed-door party-government meeting held at the National Assembly, according to Yonhap and government and political sources. Lawmakers from the Finance and Economy Planning Committee and the Trade, Industry, Small and Medium Enterprises Committee attended, while the government side was represented by Park Jeong-seong, the ministry's chief trade negotiator, and working-level officials handling the US talks.

The Encinal project — the frontrunner for the first US investment commitment — involves constructing a gas-fired combined-cycle power plant in the Encinal area of Texas. The state has seen a sharp surge in electricity demand as advanced semiconductor factories and AI data centers have proliferated, and the plant, with a total installed capacity of about 6.3 GW, is designed to meet that need.

The two sides agreed on the project in principle but haggled until the final stages over the price tag. Seoul initially considered a figure of around $20 billion, but Washington pushed for $25 billion — a 25 percent increase — stalling the talks. The two sides ultimately settled on approximately $22 billion.

To limit the risk of large upfront investment, the plant will be built in phases. The plan calls for constructing a 1.4 GW gas turbine unit first to verify actual demand and economic viability, followed by a sequential scale-up to a 4.9 GW combined-cycle facility with higher generation efficiency.

Building up to eight large nuclear power plants in the United States is the leading option under discussion for follow-on projects. The US side has proposed allocating $120 billion of the $200 billion in non-shipbuilding investment — out of the total $350 billion package, $150 billion is earmarked for the shipbuilding sector — toward the construction of eight reactors. However, South Korea's government is working to frame the commitment in broader language, such as "cooperation on building eight nuclear power plants," rather than locking in a specific dollar figure. While South Korea would bear the construction costs, domestic companies are widely expected to participate in the projects, meaning much of the capital invested in the US could ultimately flow back to Korean firms.

US investment in domestic memory chip production facilities by Samsung Electronics and SK hynix — a longstanding American demand — will not be included in the current US investment package, sources said.

Domestic legal and administrative procedures needed to finalize the investment are in their closing stages. The package must pass review by a Korea-US Strategic Investment Project Management Committee chaired by the trade minister, then go through deliberation and approval by a Korea-US Strategic Investment Operations Committee chaired by the finance minister, before being reported to the National Assembly. Monday's closed-door party-government session, held just ahead of that final National Assembly reporting step, signals that the bilateral investment agreement is nearing completion.

Once final details are ironed out, the two countries are expected to sign an MOU as early as Sept. 18.

The Ministry of Trade, Industry and Energy pushed back on the report, saying the account was inaccurate. "Consultations between South Korea and the United States are ongoing, and specific details have not yet been decided," the ministry said.


won@heraldcorp.com