Global Stakes in Texas Energy: South Korea’s $23 Billion Natural Gas Investment

South Korea is proposing a $22.6 billion investment to construct a 6.3-gigawatt (GW) natural gas-burning power plant in Encinal, La Salle County, Texas. This significant investment is part of a larger $350 billion commitment from South Korea to the U.S., which stems from a tariff agreement that reduced U.S. tariffs on South Korean goods from 25% to 15%. Initial negotiations for the power project ranged from $19.8 billion to $25 billion before concluding in the current $22.6 billion range.

The proposed power plant, which is slated for phased construction starting with a 1.4-GW gas turbine facility, is anticipated to support Texas' rapidly increasing electricity demands driven by the growth of artificial intelligence (AI) computing, data center development, and semiconductor manufacturing. The Electric Reliability Council of Texas (ERCOT) reported in June that data centers accounted for nearly 89% of its massive 438 GW of large-load user requests, underscoring the critical need for new power sources in the state.

Reports from The Korea Herald indicate that a 5 GW data center facility is also planned in close proximity to the Encinal power plant. Discussions are underway regarding whether the electricity generated will be sold directly to the state or supplied to nearby AI data centers. This initiative aligns with recent guidelines from Texas Governor Greg Abbott, which encourage data center companies to integrate their own power generation onto the state's grid.

This South Korean investment further diversifies Texas' energy portfolio, building on recent global gas investments by entities such as QatarEnergy, ExxonMobil, and the UAE. As part of its broader $350 billion commitment to the U.S., South Korea is also exploring investments in nuclear reactors within the U.S. and an LNG project in Alaska.