260 Trillion Won in U.S. Nuclear, Gas Field and Pipeline Projects... Doosan Enerbility and Steelmakers Eye a Jackpot

[Financial News] Korea's first three investments in the United States have emerged. They comprise a $22.3 billion combined-cycle gas-fired power plant, eight nuclear power plants worth $120 billion, and a $50 billion Alaska LNG (liquefied natural gas) pipeline project—more than 260 trillion won in total. The companies drawing attention are Doosan Enerbility, which manufactures gas turbines and major nuclear power equipment, and the steel industry, including POSCO.
According to industry sources on the 2nd, President Donald Trump announced Korea's first three investments in the United States on the 30th (local time). A U.S.-Korea fact sheet released on the 1st includes plans to build a combined-cycle gas-fired power plant in Encinal, Texas; construct eight of the 10 planned U.S. nuclear power plants; and develop an Alaska LNG pipeline project. The most notable point is the preferential treatment for Korean companies.
First, regarding the Texas gas-fired power plant, the fact sheet explicitly states, "It will expand the participation of capable Korean companies across all areas of the project, including power-generation equipment, engineering and construction, and long-term operations, maintenance and repairs." Attention has focused on Doosan Enerbility, the only company in South Korea that produces large gas turbines.
Given the Encinal gas-fired power plant's 6.3 GW capacity, many expect that around 10 gas turbines will be needed. Including other equipment such as steam turbines, estimates suggest that the value of supply contracts Doosan Enerbility could secure may reach 4 trillion won. This estimate is based on the case of the Hadong combined-cycle power plant, for which Doosan Enerbility won a 665.8 billion-won order and supplied two gas turbines for a 1 GW-class facility.
The variable is overseas competitors such as General Electric (GE), Siemens AG and Mitsubishi Heavy Industries, which are ahead of Doosan Enerbility in the gas turbine market. They have an edge not only in global market share built up over years in the industry, but also in performance, including gas-turbine output. Competitors' gas turbines produce 430–450 MW, while Doosan Enerbility's output is limited to 380 MW. Industry watchers expect that Korean companies could still lose out in the competition even with preferential treatment.
In the case of nuclear power, Doosan Enerbility is expected to secure a stable share of the business. For the Korean-designed APR-1400 reactor, there is no EPC (engineering, procurement and construction) option other than Doosan Enerbility. In addition, Doosan Enerbility has a long track record of supplying Westinghouse Electric Company's AP1000. Investment Project No. 2 in the United States involves building and operating two APR-1400 units and six AP1000 units.
Beyond the lack of alternatives to Doosan Enerbility, the fact sheet allocates $100 billion (approximately 136 trillion won) for construction costs alone and states, "Strategic and long-term cooperation in the global nuclear power market will be expanded through Korea's supply capabilities." Considering that the 26 trillion-won Dukovany Nuclear Power Plant involved a 5.6 trillion-won supply contract and the 20 trillion-won Barakah Nuclear Power Plant involved a 4.3 trillion-won supply contract, the supply of major equipment and EPC work could total 30 trillion won.
Although the fact sheet only mentions consideration of investment in the Alaska LNG pipeline, expectations are growing in the steel industry, led by POSCO, after President Trump referred to an investment of more than $5 million. Steel products used to build the pipeline are expected to generate high added value and require production on a scale large enough to continue for several years. Attention is focusing on SeAH Steel, an energy-pipe manufacturer, and Hyundai Steel Company, which operates a steel mill in the United States.
Above all, the fact that Chinese steel, which commands an overwhelming market share, will be shut out could provide much-needed relief to South Korea's steel industry. At a time when sales have plunged under pressure from inexpensive Chinese products, the project could secure substantial revenue for several years. In addition to steel, POSCO International, which handles the entire business chain from LNG production to sales, could also benefit. 
[email protected] Kim Yun-ho Reporter