The U.S. government has announced three new projects valued at $36 billion to be financed by Japan, this will include an oil export facility in Texas, an industrial diamonds plant in Georgia and a natural gas power plant in Ohio.
These projects will be the first investment under Japan’s $550 billion U.S. investment pledge as part of a trade deal that cut U.S. tariffs on Japanese imports to 15%, U.S. President Donald Trump said on Truth Social.
It is still unclear how much of the project’s costs are to be financed by Japanese entities. Under the U.S.-Japan agreement, profits from these projects will be shared 50-50 between the U.S. and Japan until the initial investment costs are recouped by Japan. Eventually, the profits will be split 90-10 in favour of the U.S.
Oil, Diamonds and Natural Gas
The Trump administration stated that Japan will be investing $2.1 billion in the Texas GulfLink deepwater crude export oil facility located off the Texas coast.
“This project is expected to generate $20–30 billion annually in U.S. crude exports, secure export capacity for our refineries, and reinforce America’s position as the world’s leading energy supplier,” Lutnick said.
Developed by Sentinel Midstream, Texas GulfLink has confirmed that it is part of the initiative and is “honoured to be a trusted partner with the U.S. Department of Commerce and the government of Japan.
The Texas investments will include a liquified natural gas project, but Lutnick’s statement and a White House fact sheet did not mention LNG.
The third major project in Georgia is a synthetic industrial diamond manufacturing plant that will satisfy 100% of the U.S. demand for synthetic diamond grit, a critical input for advanced manufacturing and semiconductor production. Currently, the U.S. is largely reliant on China for these materials.
The diamond plant, valued at $600 million, is to be operated by Element Six, according to the White House fact sheet. The industrial diamond company is a unit under the De Beers Group, the world’s largest diamond producer.
The Portsmouth, Ohio power plant, which is valued at $33 billion, will be the largest natural gas-fired generating facility in the world with a capacity of 9.2 gigawatts, announced Commerce Secretary Howard Lutnick.
The facility, to be operated by SB Energy, a subsidiary of Japanese tech investor SoftBank Group, will increase baseload power during a time of fast-growing electricity demand from data centres that power artificial intelligence applications.
(With inputs from Reuters)
