The potential for South Korea's APR1400 nuclear technology to enter the U.S. market is increasing through investment projects, raising interest in reducing the burden of technology fees that exceed 1 trillion won with each nuclear export. South Korea and the U.S. are working on amending the Settlement Agreement (SA) for the construction of APR1400 reactors in the U.S., focusing on adjusting technology fees and export conditions for third countries.
According to a joint fact sheet released by both countries on October 1, they have agreed to a comprehensive cooperation framework under 'Project Power' to pursue the construction of eight large nuclear reactors, including two APR1400s and six Westinghouse AP1000s, in the U.S. The investment is expected to reach up to $120 billion, comprising $100 billion for construction and $20 billion for contingencies.
If realized, this would mark the first entry of the APR1400 into the U.S. market. Previously, the construction of APR1400 reactors in the U.S. was restricted under the existing SA between Korea Electric Power Corporation (KEPCO), Korea Hydro & Nuclear Power (KHNP), and Westinghouse.
To address these restrictions, both sides plan to amend the SA. Concerns have been raised that the technology fees exceeding 1 trillion won for exporting one nuclear reactor limit export competitiveness. There have also been constraints on participating independently in new nuclear projects in some overseas markets.
As a result, there is keen interest in whether this amendment will lead to reduced costs and cooperation for exports to third countries, such as Vietnam, beyond the U.S. market. However, it is important to note that amending the agreement for APR1400 construction in the U.S. will not automatically change export conditions for other markets. The adjustment of technology fees and their scope will need to be clarified in subsequent discussions.
Efforts are also underway to secure necessary materials early. Both countries have agreed to collaborate on prepaying up to $10 billion by the end of the year, contingent on commercial viability and compliance with domestic legal requirements. This funding is intended for long-lead items, such as reactor vessels and internal structures, which require significant manufacturing time.
The specific sites, construction schedules, and commercial terms for the eight reactors have yet to be finalized. U.S. Secretary of Commerce Howard Rutnik stated on September 30 that the reactors would be built in Ohio, Tennessee, South Carolina, and Kentucky. In response, South Korea's Minister of Industry Kim Jeong-kwan noted that these regions are interested in hosting nuclear plants and emphasized the need to assess how commercial viability will be affected.
Differences in positions regarding the Alaska LNG project are more pronounced. The joint fact sheet indicates that 'Project North' will begin review based on the premise of commercial viability and compliance with domestic legal requirements under a strategic investment memorandum of understanding (MOU).
The U.S. plans to support the participation of South Korean equipment and suppliers in the project and ensure that LNG purchase contracts can be signed at economically viable prices. South Korea will also be granted priority access to the produced LNG.
However, President Donald Trump stated on the same day that the construction of the Alaska LNG pipeline is finally set to proceed, and Secretary Rutnik mentioned that over $50 billion would be invested. This statement seemed to confirm the project's advancement, contrasting with the fact sheet's indication that it is still under review.
The South Korean government maintains that further verification of the project's viability and additional negotiations are necessary. Minister Kim emphasized that the agreement between the South Korean and U.S. governments is to proceed with the Alaska LNG project only under the premise of commercial viability.
Meanwhile, the government has transferred $2.4 billion for 'Project Star,' the construction of a gas-fired combined cycle power plant in Texas, marking the first investment in a U.S. project. A Ministry of Economy and Finance official stated, 'We have sent the first investment of $2.4 billion at the official request of the U.S. side,' adding that the timing and frequency of future transfers have yet to be determined.
* This article has been translated by AI.
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