US-South Korea $350 Billion Investment Agreement Sees "Major Progress," First Project Locked on $22.3 Billion Gas Power Plant in Texas

US President Donald Trump and South Korean President Lee Jae-myung have jointly hailed "major progress" in their long-stalled investment agreement, according to reports. South Korean lawmakers revealed that the first project under the deal is a $22.3 billion gas power plant project in Texas. South Korean National Security Adviser Wi Sung-lac said Trump and Lee met for about 30 minutes on the sidelines of the United Nations General Assembly in New York. He added that they "welcomed the significant progress in the two countries' discussions on strategic investment projects." Lee said last week that South Korea reached a trade agreement with the US last year, pledging $350 billion in investment, but that choosing specific projects has kept him "awake at night." Seoul insists that any project must be commercially viable. According to South Korean lawmakers briefed on a closed-door meeting Tuesday by the Ministry of Trade, Industry and Energy, the two countries have now selected a gas power project in Texas as the first cooperative project. The breakthrough comes nearly a year after the two countries reached an agreement aimed at avoiding high US tariffs. Previous slow progress drew criticism from Trump, who repeatedly urged Seoul to speed up and warned of new tariffs if it failed to do so. The South Korean lawmakers said the $22.3 billion development project in Encinal, Texas, will build and operate a gas-fired power plant. The first phase is scheduled to begin commercial operations in 2029. One lawmaker said Related Companies Inc., NextEra Energy (NEE.US) and Lewis Energy Group will participate in the project. The lawmakers added that two other projects are still under review. One is a plan to build as many as eight nuclear reactors, and the other is an Alaska LNG pipeline project that would transport natural gas from the state's North Slope to an LNG export terminal in the south. Both projects still require approval from South Korean lawmakers and must be commercially viable a condition Seoul insisted on including in negotiations with Washington. One lawmaker said the nuclear reactor project is viewed more favorably in terms of commercial viability and is closer to being finalized, but the timeline for a formal announcement remains unclear. However, Choi Byung-il, a former South Korean trade negotiator, said commercial viability is only one of many goals for South Korea. 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 in future negotiations with the US against American protectionist policies." Choi is currently head of the trade strategy team at Bae, Kim & Lee law firm. Under the investment pledge, annual capital outflows are capped at $20 billion to avoid straining South Korea's foreign exchange reserves. Of South Korea's $350 billion commitment, $150 billion is designated for shipbuilding projects. In July, South Korea set up a shipbuilding cooperation center in Washington to help revive the US shipbuilding industry.