The US$350 billion investment agreement between the US and South Korea received “significant progress”, and the first project locked in a US$22.3 billion gas power plant in Texas

The Zhitong Finance App learned that according to reports, US President Donald Trump and South Korean President Lee Jae-myung jointly praised the “significant progress” of the investment agreement between the two countries that had been on hold for a long time. South Korean lawmakers revealed that the first project under the agreement was a $22.3 billion natural gas power project in Texas.

South Korea's national security adviser Wei Shengluo said that Trump and Lee Jae-myung met for about 30 minutes during the UN General Assembly in New York. He added that they “welcome the significant progress made by the two countries in discussing strategic investment projects.”

Lee Jae-myung said last week that South Korea reached a trade agreement with the US last year and promised to invest 350 billion US dollars, but how to choose specific projects made him “sleepless at night.” Seoul insists that any project must be commercially viable.

According to a South Korean congressman who heard a briefing from South Korea's Ministry of Industry, Trade and Resources in a closed meeting on Tuesday, the two countries have now selected a natural gas power generation project in Texas as the first cooperation project.

This breakthrough comes almost a year since the two countries reached an agreement aimed at avoiding high US tariffs. Previously, slow progress attracted criticism from Trump. He repeatedly urged Seoul to speed up action and warned that if Seoul fails to do so, it will face new tariffs.

South Korean lawmakers say the $22.3 billion development project in Encinar, Texas will build and operate a gas power plant. The first phase is scheduled to commence commercial operations in 2029. A lawmaker said Related Companies Inc., New Era Energy (NEE.US), and Lewis Energy Group will participate in the project.

Lawmakers added that two other projects are still under review. One is a plan to build up to eight nuclear reactors, and the other is the Alaska LNG pipeline project, which will transport gas from the state's northern slope to an LNG export terminal in the south.

The two projects are still subject to approval by members of the South Korean National Assembly and need to be commercially viable; this is a condition that Seoul insists on including in negotiations with Washington. A member of parliament said that the nuclear reactor project is more promising in terms of commercial viability and is closer to finalization, but the official announcement schedule is unclear.

However, South Korea's former trade negotiator Choi Byung-il said that for South Korea, commercial viability is only one of many goals. He added that by providing technology, experience, and funding totaling more than 10% of its annual GDP, South Korea aims to acquire “a strategic asset to strengthen its leverage to deal with US protectionist policies in future negotiations with the US.” Choi Byung-il is currently the head of the trade strategy team at Bae, Kim & Lee Law Firm.

According to investment commitments, the annual capital outflow is capped at $20 billion to avoid putting pressure on South Korea's foreign exchange reserves. Of the $350 billion promised by South Korea, $150 billion was earmarked for shipbuilding projects. In July, South Korea established a shipbuilding cooperation center in Washington to help revive the US shipbuilding industry.