South Korea is weighing a $22.3 billion natural gas power project in Texas that would become the first investment under its $350 billion commitment to the United States, according to government sources speaking Tuesday.

The proposed project in Encinal, Texas, would build a 6.3-gigawatt gas-fired power plant to meet surging electricity demand driven by the rapid expansion of artificial intelligence data centers and advanced semiconductor facilities in the state. Texas, served by the independent ERCOT grid, has seen some of the fastest power demand growth in the country, and state regulators and lawmakers have been expanding incentives for new gas-fired generation to keep pace with large industrial loads.

Details of the project were reported by the industry ministry during a closed-door consultation between the government and the ruling Democratic Party of Korea held at the National Assembly on Monday, according to people familiar with the matter. Trade Minister Park Jung-sung and officials involved in negotiations with Washington briefed lawmakers from the parliamentary committees overseeing finance and industry on potential projects, investment amounts, and the status of talks with the US.

The Encinal project has emerged as the leading candidate to become the first project under the $350 billion investment package Seoul pledged last year as part of a trade deal with Washington, made in return for a reduction in US tariffs on South Korean goods. Its announcement could also ease concerns that Seoul's US investment plans have been slow to get off the ground, nearly a year after the two countries agreed on the investment framework last October.

Seoul initially considered investing about $19.8 billion in the project, but the US side sought to raise the amount to roughly $25 billion. After negotiations, the two sides narrowed the gap to around $22.3 billion. The final investment amount and capacity could still change as talks continue.

The project is expected to be developed in stages to reduce the risk of committing significant capital upfront. Under the proposal, developers would initially construct roughly 1.4 gigawatts of gas turbine generation capacity, after which up to 4.9 gigawatts of more efficient combined-cycle gas generation could be added in phases, depending on electricity demand and the project's economics.

A large US nuclear power program is also being discussed as a possible follow-up investment. Washington has proposed allocating up to $120 billion of the investment package to build up to eight large nuclear reactors in the US, according to people familiar with the talks. The discussions include the possibility of using South Korea's APR100 reactor design for two of the proposed units. South Korea has an established nuclear industry, including the APR-series reactors developed by KEPCO and its affiliates, and has pursued reactor exports abroad, notably the Barakah plant in the United Arab Emirates.

The proposed nuclear program would account for the bulk of a $200 billion investment pool, which is separate from the $150 billion committed to revitalizing the US shipbuilding industry. Together, the two pools make up Seoul's $350 billion US investment package.

Under a special law governing the US investment package, the government is required to brief the National Assembly before concluding negotiations, providing an outline of the negotiated terms, the size of the investment, and the procedures that will follow. Monday's closed-door meeting can therefore be seen as part of Seoul's effort to secure parliamentary backing as negotiations with Washington enter what appears to be their final stage.

The two governments could sign a memorandum of understanding detailing the investment framework as early as Sept. 18, after completing the remaining negotiations, according to sources.

The industry ministry, however, said it could not confirm details of reports on the Texas gas project because consultations between Seoul and Washington are still underway. It added that the government would make an announcement after completing negotiations with the US and following procedures such as parliamentary approval. In a separate statement, the ministry said no decision has yet been made regarding the construction of a nuclear power plant in the US.