CHARLESTON, W.Va. — The state Department of Commerce announced overnight an agreement with China Energy to invest $83.7 billion in shale gas development and chemical manufacturing projects in West Virginia.
Gov.Jim Justice touted it as the largest private investment in West Virginia’s history. West Virginia’s gross domestic product last year was $73.4 billion.
“I realize it’s close to the unbelievable range, but we really have, I think, landed something that’s going to significantly impact and dramatically change the face of the petrochemical industry within West Virginia,” state Commerce Secretary Woody Thrasher said in an interview today with MetroNews’ Hoppy Kercheval.
The agreement was the biggest among several deals signed during President Donald Trump’s state visit to Beijing. The total value of the deals done during Trump’s trip could be as much as $250 billion, Reuters reported.
Natural gas demand in China is on the rise and poised to boom in coming years as the world’s second-largest economy aims to reduce its reliance on coal-fired power.
U.S. capacity to process liquefied natural gas is set to grow nearly seven-fold by 2019 as five export terminals open.
Thrasher, West Virginia’s Commerce secretary, signed a Memorandum of Understanding with China Energy President Ling Wen Thursday as President Trump looked on.
Photo Caption: Courtesy of the West Virginia Press Association West Virginia Commerce Secretary participates in a signing ceremony with China Energy as President Donald Trump observes.
Some national energy analysts cautioned that agreements such as a memorandum of understanding would represent a less firm commitment than a contract and the actual amount being invested could wind up being less than originally described.
The state Department of Commerce sent out a news release about the announcement just after midnight. China Energy officials had made several trips to West Virginia and the memorandum represents the first of several expected commitments by the company, the Commerce Department said.
Planning for the projects is underway and will proceed in phases over the course of 20 years, according to the release from the Commerce Department.
The projects will focus on power generation, chemical manufacturing and underground storage of natural gas liquids and derivatives.
“The plans clearly demonstrate a total value change approach, integrated from raw materials through the production of useful chemical intermediates locally,” according to the release.
The signing occurred during President Trump’s recent tour of Asia and the U.S.-China Business Exchange trade mission to enhance relations between the two countries.
Thrasher, Governor Justice and members of the state’s congressional delegation all praised the agreement.
“This is a great day for the state of West Virginia,” Justice stated. “I’ve been saying for the last couple months that the tides are turning in West Virginia and this is proof. Today is another sign as we joined with my good friend President Trump to announce the largest investment in our state’s history.”
Thrasher called the announcement the latest sign of strong partnerships with overseas companies.
“West Virginia has actively sought direct foreign investment to strengthen and diversify our economy,” Thrasher stated. “Toyota Motor Manufacturing, Hino Motors, Gestamp, Sogefi and other solid corporate citizens with international parent companies create jobs, generate incomes and support communities in West Virginia. In that same spirit, we welcome China Energy and the mutual benefits our energy collaboration will bring.”
China Energy is the recent creation of a merger between China’s state-owned coal mining company Shenhua Group and energy producer Guodian Group. The merger positions China Energy as the world’s largest power company with more than 200,000 employees.
West Virginia enjoys a strong relationship with China Energy, including ongoing research initiatives with West Virginia University. WVU and then-Shenhua Group began their relationship in 2002 with joint research on direct coal liquefaction technology.
China Energy selected West Virginia for this project because of the State’s position as a key energy-producing state and home to one of the world’s largest shale gas reserves, underpinned by a longstanding relationship between the two entities.
“The massive size of this energy undertaking and level of collaboration between our two countries is unprecedented,” Thrasher stated.
“It required cooperation between state and federal level officials. Senator Shelley Moore Capito has worked hand in hand with the West Virginia Development Office for months to ensure this unparalleled economic development opportunity was realized for the state of West Virginia.”
Capito, in her own release, said the investment announced today is a direct result of a series of meetings and calls her office had with Energy Secretary Rick Perry and Commerce Secretary Wilbur Ross.
“Expanding Appalachia’s energy infrastructure, including developing a regional storage hub and market for natural gas liquids, will have a transformative effect on our economy, our security, and our future,” stated Capito, R-W.Va.
“From driving growth and creating jobs to maximizing America’s energy potential, the benefits for West Virginia and the country from this new investment will be significant and long-lasting.”
“I am thrilled Secretary Thrasher and China Energy have signed the Memorandum of Understanding today in Beijing. I have always said that West Virginians are the hardest working people in the world. I’m glad China Energy recognizes this and is working with us to create jobs and economic growth in our state,” Manchin stated.
Sen. Joe Manchin also provided a statement expressing support for the investment.
Congressman David McKinley also stated his enthusiasm.
As Reuters reported, many of the deals announced on the China trip were packaged as “non-binding” agreements, gave scant details or rolled over existing tie-ups.“This investment in shale gas resources located here in West Virginia will spur tremendous economic growth in our communities,” stated McKinley, R-W.Va. “Secretary Thrasher has been in constant contact with my office as his team has worked out the details for this project. We commend him for his dedication to bringing new jobs to the Mountain State, and we look forward to the opportunities created by this new partnership.”
“I am somewhat skeptical of such a large number,” Alex Wolf, senior emerging markets economist at Aberdeen Standard Investments, told the Reuters Global Markets Forum, adding that the overall tone of the visit so far had been “positive”.
“I suspect they might be primarily MOUs (memorandum of understandings) instead of actual contracts and the actual contract amount may be substantially less.”
By MetroNews Staff in News | November 09, 2017 at 6:02AM