Reports of a $22.3 billion South Korean investment in a massive Texas natural gas power project drew an immediate qualification Monday, with Seoul saying negotiations with the United States remain underway and that specific details cannot yet be confirmed.
Korean news outlets reported September 7 that the proposed 6.3-gigawatt power complex in Encinal had been selected as the first project under South Korea’s broader U.S. investment commitment. The plant would reportedly supply electricity to artificial intelligence data centers.
However, South Korea’s Industry Ministry said reports about the Texas project were inaccurate, Reuters reported via AOL.
The ministry said consultations between Seoul and Washington were continuing and that an official announcement would come after negotiations and required procedures, including parliamentary consideration, are completed.
Reports Detail Massive South Texas Project
BusinessKorea reported Monday that the Encinal project would carry an estimated price of $22.3 billion, up from an earlier estimate of approximately $19.8 billion.
According to the report, the project would be developed in stages. An initial phase would add approximately 1.4 gigawatts of gas-turbine generation, followed by another 4.9 gigawatts of combined-cycle capacity if electricity demand and the project’s financial performance supported the expansion.
The publication identified Lewis Energy Group as the proposed project owner. Lewis Energy has not posted an announcement about the project on its public website.
The San Antonio-based company has a substantial presence in the area. Lewis Energy says it has operated around Encinal for more than 40 years and currently operates more than 2,500 wells across portions of Webb, La Salle, and Dimmit counties, according to its corporate operations page.
The company’s business includes natural gas production, oilfield services, and midstream gathering operations.
Major Questions Remain Unanswered
Despite the details contained in Monday’s reports, several important issues remain unresolved.
It is unclear how much of the project’s cost South Korea would finance, what other private companies might participate, which AI data centers would purchase the electricity, or when construction could begin.
Reuters reported that the initial accounts did not establish whether South Korea would fund the project’s entire cost.
Reports also described two possible arrangements for the power: selling electricity through the Electric Reliability Council of Texas or supplying it directly to nearby AI data centers through an off-grid model. No power-purchase agreements, construction schedule, or final financing structure were identified.
For now, the $22.3 billion figure represents reported terms under negotiation—not a completed investment agreement confirmed by both governments.
Project Tied To U.S.-Korea Trade Framework
The potential investment is connected to the Korea Strategic Trade and Investment Deal reached under President Donald Trump and South Korean President Lee Jae Myung.
South Korea committed to invest $350 billion in the United States under the agreement, including $150 billion directed toward American shipbuilding, according to the Office of the U.S. Trade Representative’s 2026 trade report.
The United States offered South Korea more favorable tariff treatment under the framework. The agreement also addressed American vehicle exports, agricultural trade, digital services, intellectual property, and other market barriers, according to a USTR fact sheet.
If approved, the Encinal plant could become one of the first major energy projects financed through that framework.
Texas AI Growth Drives Demand For Power
The reported project emerges as Texas races to add generation and transmission capacity for data centers, manufacturers, and a growing population.
As previously reported by The Dallas Express, Texas could The expansion has also raised concerns about electricity costs, water consumption, grid reliability, and the effects of large industrial developments on neighboring communities.
Gov. Greg Abbott directed state regulators this year to prevent data centers from transferring their infrastructure costs to Texas households and small businesses. He also said he would seek legislation A privately supplied or off-grid power model at Encinal could reduce the project’s dependence on the ERCOT grid, but its proposed structure remains unconfirmed.
Monday’s competing accounts indicate that the South Texas power project is under consideration. They do not establish that South Korea and the United States have finalized a $22.3 billion deal.
Provided by Dallas Express
