By Joyce Lee, Heejin Kim and Jihoon Lee
SEOUL, Sept 22 (Reuters) – South Korea has selected a gas-fired power plant project in Texas as the first project Seoul intends to pursue under a $350 billion investment deal with Washington and is considering two other projects, a lawmaker said on Tuesday.
South Korea’s Industry Minister Kim Jung-kwan briefed lawmakers on the plan in a closed-door meeting on Tuesday, where he also shared details on two other projects under consideration.
Lawmaker Chung Chin-ook told reporters on the sidelines on the meeting that the Texas plant was the first confirmed project, while Seoul was also discussing investing in two South Korean-designed APR1400 nuclear reactors, as part of a broader nuclear investment project.
South Korea is also discussing taking a 5% to 10% stake in US nuclear technology firm Westinghouse, while a decision on whether to participate in a long-delayed Alaska liquefied natural gas project had not been made, Chung said.
The briefing is a key step as Seoul and Washington seek to finalise implementation of a trade deal agreed in November last year that cut US tariffs on South Korean goods to 15%.
The investment commitment was made under a trade agreement struck last year under which Seoul pledged to invest in US manufacturing in exchange for lower tariffs on imports from South Korea.
TRUMP THREATS
Of the $350 billion package, $150 billion has been earmarked for shipbuilding. Details for the remaining $200 billion in strategic investments have yet to be finalised.
US officials have criticised Seoul for moving slowly on implementing the agreement, particularly compared with countries such as Japan. US President Donald Trump threatened South Korea with higher tariffs earlier this year over the pace of implementation.
President Lee Jae Myung said on Friday that commercial viability had become a sticking point as negotiators moved from a broad agreement to the details of individual projects.
Lee said Seoul had sought to ensure the agreement referred to “commercially reasonable” investments, amid questions over returns, profit-sharing and how losses from unprofitable projects would be handled.
South Korea’s government currently needs to just provide lawmakers with a briefing on projects deemed commercially reasonable, rather than seek formal consent from parliament.
Opposition lawmakers have demanded closer parliamentary scrutiny, warning that Seoul could be exposed to disproportionate financial risks in energy projects.
Projects that are not commercially feasible, but that the government wants to pursue in the interest of national security or supply chain stability, would require parliamentary consent, according to the South Korean bill on US strategic investment.
POWER AND NUCLEAR PROJECTS
The 6.3-gigawatt Texas gas-fired power plant project in Encinal is valued at more than $20 billion and is intended to supply electricity to AI data centres and chip factories, according to media reports and another lawmaker.
Seoul and Washington have also been discussing construction of as many as eight large nuclear reactors in the United States, two of which will be built using Korea’s APR1400 model while the remaining six will deploy Westinghouse’s AP1000 design, a source briefed on the negotiations said.
A separate source with knowledge of the discussions also said that South Korea was seeking to cap annual investment at $20 billion to limit the impact on local currency markets.
The briefing to the National Assembly’s trade committee was postponed last week while negotiators sought to bridge differences between US and South Korean positions, officials and media reports said.
Lee travelled to the United States this week to attend the UN General Assembly, where he is seeking meetings with Trump and other leaders.
(Reporting by Joyce Lee, Heejin Kim and Jihoon Lee Editing by Brenda Goh and Ed Davies)
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