Japan has delivered the first tranche of its $550 billion investment commitment to the United States, totaling $36 billion. A significant portion is allocated to a 9.2-gigawatt natural gas power plant, a key element of last year's U.S.-Japan trade agreement. U.S. Secretary of Commerce Howard Lutnick described the Ohio-based facility as the "largest natural gas power plant in history." The project, to be operated by SB Energy, a subsidiary of Japan's SoftBank, aims to enhance grid reliability, expand baseload power supply, and support U.S. manufacturing with affordable energy.
The remaining funds will be used for a synthetic diamond factory and the Texas GulfLink deepwater crude oil export terminal in Texas. The latter is projected to handle up to one million barrels per day, generating an estimated $20 to $30 billion in annual U.S. crude exports. This investment underscores the surge in U.S. electricity demand, particularly from artificial intelligence-driven data centers. The International Energy Agency noted this week that global power demand is growing at its fastest pace in 15 years, with natural gas emerging as the preferred source for reliable, 24/7 power.
The 9.2-gigawatt natural gas plant, which constitutes the bulk of the initial $36 billion investment, will be constructed in Ohio. Secretary Lutnick stated that the project will "strengthen grid reliability, expand baseload power, and support U.S. manufacturing with affordable energy." It directly addresses the rapid growth in U.S. electricity demand. Data from the International Energy Agency indicates U.S. electricity demand grew by 2.1% in 2025 and is projected to increase by nearly 2% annually through 2030, with data center expansion driving half of this growth. Natural gas, along with nuclear power, is a major beneficiary of the AI boom, as both provide the constant power required by data centers. However, natural gas plants are being prioritized due to the longer construction timelines and higher costs associated with nuclear facilities.
The Texas GulfLink deepwater oil export terminal received approval from the previous administration earlier this month. Led by Sentinel Midstream, the project has a capacity of one million barrels of crude per day. The Secretary of Transportation stated, "The Texas GulfLink project demonstrates that when we cut unnecessary red tape and unleash the fossil fuel industry, we create jobs at home and stability abroad. This critical deepwater port will enable the U.S. to export our abundant resources faster than ever before." A U.S. Department of Commerce fact sheet on the agreement with Japan estimated that the deepwater facility will generate $400 to $600 billion in revenue over 20 years and advance the previous administration's energy dominance agenda.
The energy commitments are part of trade agreements made last year, where several nations pledged to import U.S. energy to avoid the threat of significant tariffs, which proved an effective tool for pursuing energy dominance. The U.S.-Japan trade agreement, finalized last summer, included reducing proposed tariffs on Japanese imports from 25% to 15%, alongside Japan's $550 billion investment pledge. Japan also committed to expanding market access for U.S. goods, including automobiles, agricultural products, and energy. A notable parallel commitment was from the European Union, which pledged to purchase $750 billion worth of U.S. oil and gas. Analysts, however, view this target as unachievable due to physical constraints, including limits on the availability of such large commodity volumes, consumption capacity, and price considerations.