This is a long-dated signal rather than an immediate shift in supply or demand, since reactors take years to build and the Alaska LNG scheme still needs binding financing, so the near-term effect on oil and gas prices is likely to be limited. It does reinforce US energy and power as a policy priority, which may support sentiment towards nuclear, LNG and power-equipment names, and towards the Asian buyers already lining up for Alaskan gas. The Texas plant's link to chip plants and data centres underlines how much power demand is being driven by technology. Energy prices remain elevated after the Iran conflict, but the package is a promise rather than a funded delivery schedule, so markets will want detail on financing, timelines and which companies are involved.
---Trump has unveiled $200 billion of South Korean-backed US energy projects spanning nuclear, Alaskan LNG and Texas gas power, but questions over viability and financing remain.
Summary:
US President Donald Trump said the United States and South Korea will launch $200 billion of new investments in US energy projects, announcing three major schemes after meeting South Korean President Lee Jae-myung in New York. Trump said the plan builds on the $350 billion Strategic Trade and Investment Agreement he reached with Lee last year, and described the projects as American energy and power builds across the country.
The first project is a $120 billion nuclear program to build eight large reactors in the United States, six Westinghouse AP1000 units and two South Korean APR-1400 units. The second is an Alaskan liquefied natural gas project that Trump put at $50 billion, intended to develop Alaska's gas resources, build new US gas infrastructure and employ American workers. The third is a $22 billion gas-fired power plant of about 6.4 gigawatts in Encinal, Texas, which Trump said will add significant and reliable supply to the Texas grid.
The Korea Times reported that the $200 billion is the strategic investment portion of the $350 billion package agreed last year, with the other $150 billion earmarked for shipbuilding. It put the Alaska project at $54 billion and said it would involve an 807-mile pipeline from the North Slope to a liquefaction facility on the southern coast, moving about 4 billion cubic feet of gas a day and producing around 20 million tonnes of LNG a year for Asian buyers. The developer is Glenfarne, and Japan's JERA and Tokyo Gas have signed preliminary agreements to buy a combined 2 million tonnes a year if the project proceeds, although more commitments are still needed to secure binding financing. The same report said the Texas plant was the first project approved under the program and would supply power to semiconductor plants and data centres, and that South Korea was still considering investment in the reactors.
Not everyone in Seoul is convinced. The Korea Times said South Korean opposition lawmakers raised concerns about the commercial viability of the projects, and the Korea JoongAng Daily noted unresolved concerns over the viability of the Alaska scheme. Seoul has said the projects must meet commercial standards. The Korea JoongAng Daily also noted that Trump is promoting his economic record ahead of the November midterm elections, at a time of elevated energy prices following the monthslong conflict with Iran.
Reports so far do not set out which Korean companies will take part in each project, the construction timelines or how the financing will be structured, so the details will be a focus as the plans move from announcement to execution.
This article was written by Eamonn Sheridan at investinglive.com.
Source: Investing Live - News
