South Korea is nearing a decision to back a $19.8 billion gas-fired power project in Texas as the first investment under its strategic U.S. investment commitment, according to government and industry sources Tuesday.

The project, planned for Encinal, Texas, would have 6.4 gigawatts of generation capacity and is under final discussion between Seoul and Washington.

Korea is expected to invest in the project through an equity stake in a special-purpose vehicle, with major Korean engineering and plant companies also likely to take part. The investment is expected to be financed through Korea's U.S. strategic investment fund, while the size of Seoul’s contribution and equity stake remain under discussion.

Industry Minister Kim Jung-kwan raised the project with U.S. Commerce Secretary Howard Lutnick and Energy Secretary Chris Wright during a visit to Washington from July 22 to Saturday, as the two sides worked through its financing structure and commercial viability.

According to sources, the development would include 1.4 GW of gas turbine capacity and 5 GW of combined-cycle generation. The site and long-term natural gas supply have already been secured, and the first phase is expected to begin commercial operations in 2030.

The project has drawn interest in Seoul because it offers a relatively clear path to stable returns.

A data center complex with up to 5 GW of capacity is planned nearby, creating a major source of long-term electricity demand. Power purchase agreements with data center operators could provide steady revenue for more than a decade, helping meet Seoul’s requirement that overseas investments be commercially viable, industry officials said.

Kim highlighted that logic during his U.S. trip, telling reporters that projects with stable cash flow were more attractive and that energy projects held an advantage on that front.

For the U.S., the project would add new generation capacity in Texas as electricity demand rises sharply alongside the expansion of artificial intelligence data centers. If advanced, it would also become an early test of the Korea-U.S. strategic investment framework, which was designed to channel large-scale Korean capital into U.S. projects while keeping them commercially grounded.

The investment would be carried out under the Korea-U.S. strategic investment framework agreed as part of last year’s tariff deal. Korea committed $350 billion in total U.S. investment under the agreement, including $150 billion for shipbuilding cooperation and $200 billion for broader strategic projects.

Seoul has since enacted legislation to support the investment program and launched the Korea-U.S. Strategic Investment Corp. to oversee its implementation.

The Texas project could be reviewed by the bilateral strategic investment committee as early as August. It would then be subject to further U.S. review and presidential approval before being formally designated as the first project under the framework.

An Industry Ministry official said Seoul remained in close consultations with Washington, but that neither the final project details nor the timing of an announcement had been decided.