West Virginia was the biggest recipient of the $250 billion of investments signed during President Donald Trump’s visit to China.
China Energy Investment Corp. plans to invest $83.7 billion in shale gas development and chemical manufacturing projects in the state over two decades, according to the state’s Department of Commerce.
The memorandum of understanding marks the first step in a series of commitments the company expects to make in West Virginia. These include power generation, chemical manufacturing and underground storage of natural gas liquids derivatives. The size of the proposed investment is larger than the state’s gross domestic product last year of $73.4 billion.
Although the deal’s non-binding, it was welcomed in a state that’s borne the brunt of coal’s long-term decline. West Virginia Governor Jim Justice, a coal and real estate mogul elected to office last year, has lobbied the Trump administration to prop up the state’s coal-mining sector.
“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,” said U.S. Senator Shelley Moore Capito, a West Virginia Republican.
China Energy Investment was formed from the combination of Shenhua Group Corp., the nation’s largest coal miner, and China Guodian Corp., one of its top-five power generators.
Without a contractual obligation, there’s no guarantee developments agreed to in a memorandum will get funded and built.
"At the end of the day what really counts is contracts," Jason Feer, head of business intelligence at Poten & Partners Inc. in Houston, said on Nov. 8. "An MoU is usually an agreement to continue talking."
By Jim Polson
