US President Donald Trump’s administration on Tuesday announced three projects valued at US$36 billion to be financed by Japan, including an oil export facility in Texas, an industrial diamonds plant in Georgia and a natural gas power plant in Ohio.
The projects are the first investments under Japan’s US$550 billion US investment pledge as part of a trade deal that cut Trump’s tariffs on Japanese imports to 15 percent, Trump said on Truth Social. He gave few details about the projects.
US Secretary of Commerce Howard Lutnick said in a statement that the Portsmouth, Ohio power plant, valued at US$33 billion, would be the largest natural gas-fired generating facility in history with a capacity of 9.2 gigawatts.
Photo: AFP
The facility, to be operated by SB Energy Corp, a subsidiary of Japanese tech investor Softbank Group Corp, would increase baseload power at a time of fast-growing electricity demand from data centers built to power artificial intelligence (AI) applications.
The White House said Japan would invest in the US$2.1 billion Texas GulfLink LLC deepwater crude oil export facility off the Texas coast.
“This project is expected to generate US$20 billion — US$30 billion annually in US crude exports, secure export capacity for our refineries, and reinforce America’s position as the world’s leading energy supplier,” Lutnick said.
Texas GulfLink, which is being developed by Sentinel Midstream LLC, confirmed that it was part of the initiative and was “honored to be a trusted partner with the US Department of Commerce and the government of Japan.”
Trump said the Texas investments would include a liquefied natural gas project, but Lutnick’s statement and a White House fact sheet did not mention LNG.
Lutnick said the third major project in Georgia was a synthetic industrial diamond manufacturing plant that would satisfy 100 percent of US demand for synthetic diamond grit, a critical input for advanced manufacturing and semiconductor production. The US currently relies largely on China for such supplies.
The high-pressure synthetic diamond plant, valued at about US$600 million, will be operated by Element Six Ltd, the White House said in a fact sheet. The industrial diamond company is a unit of De Beers Group, the world’s largest diamond producer.
It was unclear how much of the projects’ costs would be funded by Japanese entities and under what conditions. Under an earlier US-Japan agreement, profit from the projects was due to be shared 50-50 between the US and Japan until Japan’s initial investment costs were recouped, after which profit would be split 90-10 in favor of the US.
The administration’s announcements followed meetings last week between Lutnick and Japanese Minister of Economy, Trade and Industry Ryosei Akazawa, where they worked out remaining issues before deals could be announced.
“All of these projects involve Japan and the United States working together to build supply chains in strategically important fields,” Akazawa told reporters in Tokyo yesterday.
He also said that Japan would continue to work with the US for more investment deals, adding that Tokyo has pledged investments of up to US$550 billion before the end of Trump’s current term in office.
While declining to comment on the estimated timing for forthcoming deals, Akazawa said he, as a negotiator, “would keep in mind that Prime Minister Sanae Takaichi’s planned US visit [in March] would be fruitful.”
Multiple Japanese firms expressed interest in the three initial projects, according to the Japanese government, including Noritake Co as an off-taker for the diamond project, Mitsui O.S.K. Lines Ltd and Nippon Steel Ltd as suppliers for the crude oil export facility project, and Hitachi Ltd and Toshiba Corp for the power project.
Japan’s investment package would consist of equity, loans and loan guarantees from state-owned agencies Japan Bank for International Cooperation and Nippon Export and Investment Insurance.
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