Trump Unveils $200bn South Korean Investment in US Energy Projects

US President Donald Trump announced from the White House on Sept 30 that South Korea will invest $200 billion in American infrastructure projects, including an Alaska liquefied natural gas pipeline, a gas-fired power plant in Encinal, Texas, and eight new nuclear reactors, as part of a broader $350 billion strategic investment package tied to a 2025 trade agreement.¹²³⁴

The package

The $200 billion figure sits within a wider $350 billion strategic investment package agreed under the 2025 US-South Korea trade deal, of which $150 billion is earmarked for shipbuilding and $200 billion for other strategic sectors.⁴³⁷

As part of the deal, the US cut its reciprocal tariff rate on goods from South Korea, dropping it from 25 percent down to 15 percent in return for Seoul's investment pledges.²⁸¹

South Korea and the United States designated a $22.3 billion LNG-fuelled power plant in Encinal, Texas, as the first confirmed project under the package. The facility is to have a generating capacity of 6,472 megawatts, with commercial operation targeted for 2029.⁸

Washington and Seoul also struck a nuclear agreement under which eight large-scale reactors would be built for a combined $120 billion, with the Korean APR1400 design used in at least two of them. The two sides were discussing paying up to $10 billion by year's end for reactor equipment, and Korean companies were seeking to acquire a 5-10 percent stake in Westinghouse at the time of its IPO.⁸²⁹

Dispute over Alaska LNG

Trump said $54 billion of the funding would support the long-delayed Alaska LNG project from developer Glenfarne, a pipeline stretching about 1,298km from the North Slope to a coastal export terminal with capacity to yield as much as 20 million metric tons of liquefied natural gas each year.¹³²⁵

South Korean officials pushed back on the scale of commitment. Trade Minister Han Jeoung-ae said the Alaska project has not been finalised, stating, "The Alaska LNG project will be decided on the basis of sufficient review in accordance with our domestic legal procedures." Seoul's trade minister separately said only the Texas investment was finalised, raising doubts about the Alaska project's commercial viability.⁶³

Seoul has previously said any project must meet commercial viability standards. Elsewhere, Japanese firms JERA and Tokyo Gas have reached initial deals totaling 2 million metric tons annually from the Alaska project, though Glenfarne says another 3 million tons in commitments are still needed before financing can move forward.⁴³

Commerce Secretary Howard Lutnick said of the financing arrangement, "These projects are being financed, fully paid for, by the Korean government for the benefit of the United States." Glenfarne's Brendan Duval said pipeline construction would take three years once financing is in place, with exports to begin roughly two years after gas starts flowing to Alaskans. Energy analyst Larry Persily, however, criticised the announcement as premature given the scale of preparation an Arctic pipeline would require.⁶

Political backdrop

The announcement arrived weeks before the November midterms, which will determine control of Congress, with Trump pushing to defend his party's economic record; a July AP-NORC survey showed roughly just one in three Americans backed his economic performance.¹⁵

Trump repeatedly credited Alaska's Republican Senator Dan Sullivan, who is in a competitive re-election race, saying, "This is a great senator who is totally responsible for this pipeline." Sullivan called the project "huge for Alaska." Democratic challenger Mary Peltola also welcomed the investment, saying she had supported the project in Congress and the state legislature.⁶⁵

Democrats have targeted Alaska and Iowa Senate seats as part of a strategy to gain a Senate majority. A day earlier, Trump had announced a $15 billion steel plant in Iowa to support Republican candidate Ashley Hinson. Trump also announced plans for campaign trips to Texas, Alabama, Ohio and Nebraska, and said, "I've done a very bad job of explaining" his administration's accomplishments.⁵⁶

In Texas, home to the planned Encinal plant, Republican Ken Paxton faces Democrat James Talarico for an open Senate seat, with Talarico aiming to break a Democratic drought dating back to 1994 in statewide Texas races.¹