SEOUL, September 22 (AJP) - South Korea is ready to transfer $2.2 billion this month to help fund a gas-fired power project in Texas once U.S. President Donald Trump gives the go-ahead, the Korean industry minister said Tuesday.
The $22.3 billion project would be the first under Seoul’s $200 billion investment pledge to Washington.
The Ministry of Trade, Industry and Resources briefed the National Assembly’s trade and industry committee on three candidate projects under a special act authorizing South Korea’s broader $350 billion U.S. investment commitment, which includes $150 billion earmarked for shipbuilding.
The candidates are a combined-cycle gas-fired power plant in Encinal in South Texas, eight large nuclear reactors in the United States and a liquefied natural gas project in Alaska.
Industry Minister Kim Jung-kwan told lawmakers that the government would proceed first with the Texas venture while further reviewing the other two proposals against the interests of both countries. The Encinal project is expected to have about 6.3 gigawatts of generating capacity.
“The first project has been decided, while the second and third projects are still under review,” a member of the parliamentary committee told AJP.
The nuclear proposal calls for eight reactors, including two that could use South Korea’s APR1400 design and six based on Westinghouse’s AP1000 technology. Seoul is also negotiating with Washington over acquiring a 5 percent to 10 percent stake in Westinghouse, according to the ministry’s briefing.
The Alaska LNG project faces greater uncertainty.
“The Alaska LNG project lacks commercial rationality,” a ruling Democratic Party lawmaker on the committee told AJP.
The government has stressed that projects must meet commercial viability standards. Alaska LNG has faced questions over its massive infrastructure costs and expected returns.
The government told lawmakers that the first transfer under the investment program was expected to total $2.2 billion and take place this month, according to parliamentary sources.
Seoul and Washington have been discussing a framework for transferring funds following the conclusion of their agreement. Officials have said payment could be made within 45 days of a U.S. request.
Seoul also reaffirmed that annual investments would be capped at $20 billion, with no further investment required once the cumulative total reaches $200 billion.
The Trump administration has expressed frustration with the pace of Seoul’s implementation of its investment pledges.
Japan has a similar investment arrangement with Washington in return for tariff relief, committing to a $550 billion framework for strategic investment and financing in the United States.
Projects worth up to $109 billion have been officially announced under Japan’s framework. Initial and phased co-financing agreements totaling about $6.9 billion have been signed for five projects, according to publicly available data.
Copyright ⓒ Aju Press All rights reserved.