A monumental $200 billion investment pledge from South Korea to the U.S., heralded by former President Donald Trump as a generational transformation for America's energy landscape, is facing crucial caveats. While exciting in scope, particularly the long-planned Alaska liquefied natural gas (LNG) project, South Korean President Lee Jae Myung has clarified that many aspects are far from a done deal.
Trump, in a late Wednesday Truth Social post, announced a supposed agreement on the Alaska LNG project, valuing it at an astounding $50 billion. However, President Lee swiftly responded on X (formerly Twitter) local time on Thursday, stating that participation in the Alaska LNG venture is strictly contingent on its financial viability and full legal compliance. He extended this scrutiny to other proposed nuclear power plant investments, asserting a plant-by-plant commercial assessment is necessary.
The joint U.S.-South Korea statement released earlier Wednesday did echo this sentiment, noting that work on the project would proceed only given its "commercial reasonableness," though specifics on allocations remained vague.
US President Donald Trump speaks on the day he makes an announcement about an energy infrastructure project in Alaska, in the Oval Office at the White House in Washington, D.C., US, Sept. 30, 2026.
Kevin Lamarque | Reuters
The Alaska LNG project aims to transport natural gas over 1,300 kilometers (800 miles) from Alaska's North Slope fields to the southern coast for liquefaction and export, primarily to Asian markets. Historically, this project has been plagued by economic uncertainties due to the massive upfront capital required. Last year, Industry Minister Kim Jung-kwan frankly described it as "high-risk," indicating that participation would be difficult without clear prospects for substantial cash flow.
Beyond the Alaska LNG contention, the broader investment package includes a significant $22.3 billion commitment towards a 6,472-megawatt natural gas power facility in Encinal, Texas. This facility is designed to supply electricity to co-located data centers, with developer Related Cos. and U.S. power giant NextEra Energy leading the charge. Commercial operations for its initial phase are slated for 2029, with full completion by 2032.
Trump enthusiastically claimed these investments would spark "huge construction projects" and generate "tens of thousands of American jobs," emphasizing the creation of new power capacity, manufacturing, and employment opportunities for U.S. workers.
The two nations also signaled intentions to bolster Korean companies' involvement in the Texas project, covering equipment supply, engineering, construction, and long-term operations and maintenance. The U.S. further seeks to provide Korean firms with opportunities to supply equipment, including critical turbines, for similar projects nationwide.
Another substantial portion of the investment, $120 billion, is earmarked for constructing eight large-scale nuclear reactors across the U.S. Of this, $100 billion is for construction costs and $20 billion for contingency reserves. This nuclear agreement saw the signing of both governments, alongside Westinghouse Electric, Korea Electric Power Corp., and Korea Hydro & Nuclear Power. Plans also include exploring a potential significant minority investment in Westinghouse by Korean companies, subject to commercial negotiations.
