South Korea and the US have agreed on an investment of approximately $22.3 billion to build a gas-fired power plant in Encinal, Texas. The facility will have a combined capacity of 6.3 gigawatts and is specifically designed to meet the electricity needs of AI data centers.
The project is the first major implementation of a bilateral trade framework established in 2025. Under this agreement, South Korea committed to total US investments of $350 billion, consisting of $200 billion for cash and strategic projects and $150 billion for shipbuilding cooperation.
In return for these investments, the US has agreed to maintain tariffs on Korean goods at 15%. The final investment amount for the gas plant was previously estimated at $19.8 billion in July 2026, with discussions reaching up to $25 billion before settling at the current figure.
US Commerce Secretary Howard Lutnick and Energy Secretary Chris Wright were key figures in finalizing the agreement. South Korean firms, including Samsung C&T, Hyundai E&C, and Doosan Enerbility, are expected to lead the construction and engineering of the plant.
The facility will be a combined-cycle plant, using both gas and steam turbines to increase efficiency. Such plants typically convert around 60% of fuel energy into electricity, compared to approximately 35% for older, simple-cycle designs.
