Korea's $350B US Pledge: The Texas Project and the Fine Print

South Korea and the US are reportedly nearing a memorandum of understanding — possibly by September 18, 2026 — on a $22.3 billion gas-fired power plant and AI data center complex in Encinal, Texas, the likely first concrete project under Korea's broader $350 billion US investment pledge. The project itself is still unconfirmed and subject to Korea's own parliamentary approval process, but the more consequential open question for investors isn't this one plant — it's how the profits from the underlying $350 billion fund actually get split, a point the US and Korean governments have publicly disputed.

This analysis is part of Koreanalysis's coverage of Korea's $350 billion US investment pledge and its energy and trade policy spillover.

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What Is the $350 Billion Pact, and Why Does the Profit Split Matter?

As part of last year's tariff negotiations, South Korea committed to a $350 billion package of investment in the United States, in exchange for the US capping tariffs on Korean goods at 15%. Within that headline figure, Korea has separately secured $150 billion earmarked for shipbuilding cooperation, distinct from the remaining roughly $200 billion covering semiconductors, batteries, biotechnology, and nuclear energy — a structure Korean officials describe as more favorable than the terms Japan received in its own, larger $550 billion pledge.

The profit-sharing terms of the fund became a public point of friction in late 2025, when US Commerce Secretary Howard Lutnick said 90% of the profits generated would go to Americans. Korea's presidential chief of staff, Kim Yong-beom, pushed back on that framing, arguing the "90%" language in the official documentation refers to reinvestment inside the US rather than profit extraction — in his words, profits would stay in the US "instead of immediately leaving as dividend outflows" back to Korea. As of this writing, specific investment amounts and locations for most of the $350 billion remain undetermined, which is part of why the two governments' interpretations haven't fully converged.

What Is the Encinal, Texas Project, Specifically?

Encinal is a small South Texas town sitting atop the gas-rich southern end of the Eagle Ford shale play. The proposed project is a 6.3-gigawatt gas-fired power complex — an initial 1.4-gigawatt simple-cycle gas plant targeted for completion by 2030, with up to 4.9 additional gigawatts of higher-efficiency combined-cycle capacity added later depending on demand. Gas supply would come from Lewis Energy, a Texas producer that has operated in the Eagle Ford for more than 40 years. The plant is intended to power an adjacent AI data center campus being developed by Related Digital, an affiliate of US real estate developer Related Companies — though no anchor data center tenant (a hyperscaler like Google or Meta) has been publicly confirmed yet.

On cost, Korea reportedly initially proposed around $19.8 billion while the US sought closer to $25 billion; the two sides have since narrowed toward roughly $22.3 billion, though Korea's industry ministry has stated it "could not confirm details" and that any announcement would follow completed negotiations and parliamentary approval procedures.

Project	Status	Scale
Korea — Encinal, TX gas plant + AI data center	Under negotiation, MOU possibly Sept 18, 2026	~$22.3B; 6.3GW (1.4GW first phase)
Japan — Ohio gas plant (SB Energy)	Confirmed Feb 18, 2026	~$33B; 9.2GW
Japan — Texas crude export terminal (GulfLink)	Confirmed Feb 18, 2026	~$2.1B; $20-30B/yr export capacity
Japan — Georgia synthetic diamond plant (Element Six)	Confirmed Feb 18, 2026	~$600M

⚠️ None of this is finalized, and the profit-split question is still genuinely unresolved

Korea's industry ministry has explicitly declined to confirm the Encinal project's details, and it still requires National Assembly approval before becoming official. Separately, the 90%-profit dispute isn't a settled matter with one side simply wrong — it reflects real ambiguity in the underlying memorandum's text, which Korea itself has said doesn't cleanly specify a single interpretation. Investors should treat both the project specifics and the fund's profit mechanics as still in motion rather than locked in.

✅ What to watch from here

• Whether the September 18, 2026 MOU date holds, and what final cost figure and ownership structure it actually specifies.
• Which Korean private companies participate in the special-purpose vehicle expected to be set up for the project — not yet disclosed as of this writing.
• A separately floated, unconfirmed follow-on proposal for up to eight additional nuclear reactors (a mix of Westinghouse AP1000 and Korean APR1400 units) at the same site, which Korea's industry ministry has explicitly said remains undecided — worth tracking, not assuming.

Japan's three confirmed projects show what a completed version of this kind of deal looks like in practice — Korea's Encinal project is still the negotiation, not yet the agreement.

What Should Investors Watch Next?

This unfolds against a broader US-Korea trade relationship that remains genuinely mixed: even as the investment pact moves toward its first concrete project, Korea was separately hit with a 12.5% "forced labor" tariff under Section 301 in July 2026 — one of the less-favorable rates among America's trading partners, since Korea didn't secure the country-specific exemptions the EU, Taiwan, and several others obtained. How the investment pact's goodwill interacts with these separate, ongoing tariff frictions — and whether Korea's shipbuilding-specific carve-out proves more durable than the broader chips/battery/bio/nuclear bucket — is worth continued attention as the relationship's terms keep getting filled in piece by piece.

Frequently Asked Questions

Q1. Is the Encinal, Texas project officially confirmed?

A. Not as of this writing. Korea's industry ministry has said it cannot confirm details and that any official announcement will follow completed negotiations and National Assembly approval. A memorandum of understanding was reportedly possible around September 18, 2026, but that date and the deal's terms are not guaranteed to hold.

Q2. Does the US really get 90% of the profits from Korea's $350 billion investment?

A. That characterization is disputed. The US side has described a 90% figure, while Korea's government has argued the underlying text refers to profits being reinvested inside the US rather than extracted as dividends to Korea — and that the ambiguity in the original documentation hasn't been fully resolved between the two governments.

Q3. How does Korea's deal compare to Japan's $550 billion pledge?

A. Japan's pledge is larger in headline terms and already has three confirmed projects (an Ohio gas plant, a Texas crude export terminal, and a Georgia synthetic diamond plant, totaling roughly $33-36 billion). Korea's package is smaller but reportedly includes a $150 billion shipbuilding-specific carve-out that Korean officials describe as a stronger safeguard than what Japan secured.

Japan's three confirmed projects show what a completed version of this kind of deal looks like in practice — Korea's Encinal project is still the negotiation, not yet the agreement.