Texas AI Data-Center Boom Makes Energy Project First Candidate for South Korea’s U.S. Investment

A 6.3-gigawatt gas-fired combined-cycle project in Texas has emerged as the first candidate for South Korea’s strategic investment in the United States, with the government planning to invest up to $200 billion over the next 20 years. The choice reflects the view that energy projects offer the clearest path to the government’s requirement of “commercial rationality,” meaning the recovery of principal and interest.

Energy demand in the United States is expanding rapidly as artificial intelligence data centers spread. Texas, the country’s largest natural-gas-producing state, also has renewable-energy infrastructure. Demand from major technology companies such as Meta has increased pressure to build new power supplies. Reuters reported that requests to connect to the Texas grid for AI data centers and other facilities had surged from 48 gigawatts in 2023 to 474 gigawatts recently, although some of that demand represents speculative efforts to secure electricity in advance.

The Encinal gas project is designed to respond to the data-center demand. Lewis Energy Group, which has operated in Texas for more than 40 years, is participating as the project developer. The planned capacity equals roughly six large nuclear reactors. Unlike a nuclear plant, which typically takes more than a decade to build, a combined-cycle gas plant could be completed in about three years if construction proceeds simultaneously.

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Commercial rationality

The technology uses liquefied natural gas to run a gas turbine and then captures exhaust heat above 500 degrees Celsius to drive a steam turbine and generate additional electricity. After negotiations over the amount, the reported investment was set at $22.3 billion. South Korea may first test the project’s viability through a 1.4-gigawatt gas-turbine phase before deciding whether to expand investment in the 4.9-gigawatt steam-turbine phase.

Other projects discussed in government-party consultations included eight nuclear reactors, an Alaska LNG pipeline and an undersea tunnel. These proposals would offer an investment package to U.S. President Donald Trump ahead of November’s midterm elections. South Korea’s Ministry of Trade, Industry and Energy said the two countries were discussing various projects, but that specific details had not been settled and would require domestic procedures and further talks with the United States.

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The two countries are conducting various consultations to identify investments in the United States, but specific details have not been decided.