Japan commits $36B to US energy, critical mineral projects
Initial tranche of $550B trade deal includes massive Ohio natural gas plant and synthetic diamond facility
Japan has committed an initial $36 billion toward three major US projects, marking the first phase of a broader $550 billion trade and investment agreement designed to bolster American industrial capacity and energy independence.
The investment package, formally launched in February 2026, includes what would be the largest natural gas-fired power plant in US history—a $33 billion facility near Portsmouth, Ohio, operated by SoftBank's SB Energy division. The 9.2 gigawatt plant will generate enough electricity to power approximately 7.4 million homes, equivalent to roughly nine nuclear reactors on the PJM grid, according to multiple sources.
A $2.1 billion deepwater crude oil export terminal in Texas, operated by Sentinel Midstream, forms the second pillar of the package. The GulfLink facility is expected to support up to $30 billion in annual exports once operational, enhancing America's energy export capabilities. The third project—a $600 million synthetic diamond manufacturing plant in Georgia operated by Element Six, a subsidiary of De Beers—aims to satisfy 100% of US demand for industrial diamond grit used in semiconductors, automotive parts, and energy tools, reducing reliance on foreign supply chains.
"This initiative is seen by both nations as a way to enhance economic security and reduce dependence on foreign sources, particularly in critical minerals and materials, in an apparent challenge to China's dominance in these areas," The Guardian reported.
The $550 billion commitment was first announced in July 2025 as part of a comprehensive US-Japan strategic trade and investment agreement, according to the Commerce Department. The deal aims to revitalize the American industrial base, create jobs, and bolster national and economic security while strengthening bilateral trade flows. In exchange for Japanese investment, the US has agreed to reduce tariffs on Japanese imports, including automobiles, to 15%.
The Ohio natural gas facility is particularly significant as it addresses surging baseload power demand driven by artificial intelligence data centers and broader electrification trends. Japanese industrial leaders including Toshiba and Hitachi have expressed interest in joining the consortium, according to industry reports.
These three projects are the first approved by the U.S.-Japan investment committee established under the trade framework and require final approval from the U.S. President, The Japan Times reported. The investment committee was created to review and authorize Japanese investments in strategic US sectors.
Market analysts view the agreement as a significant development in US efforts to onshore critical manufacturing capabilities while strengthening alliances with key Asian partners. The focus on energy independence and supply chain resilience comes amid broader geopolitical competition with China for dominance in advanced technologies and critical materials.
The synthetic diamond facility in Georgia represents a strategic move to secure domestic production capacity for materials essential to semiconductor manufacturing and advanced industrial applications. By targeting 100% of US demand, the project aims to eliminate dependence on foreign sources, particularly from China, which currently dominates the global market for synthetic diamond grit.
The massive scale of the Ohio natural gas plant signals confidence in continued US demand for fossil fuel infrastructure even as the nation transitions toward renewable energy sources. Its location in the PJM Interconnection—the nation's largest electric grid serving 65 million people—positions it to address regional power needs, particularly as data center expansion drives electricity consumption higher.
Investors and industry watchers are now awaiting details on subsequent phases of the $550 billion commitment, which could include additional investments in semiconductor manufacturing, clean energy technology, and other strategic sectors identified as priorities under the bilateral agreement.