In the midst of President Trump’s three-day mission to China to forge energy deals between the two nations, at least one was finalized. On November 9, West Virginia provided a boost to its economic future when the state’s commerce secretary, H. Wood Thrasher, signed a memorandum of understanding with Ling Wen, a representative from China Energy Investment Corp. Ltd., that spells out an estimated $83.7 billion investment in shale gas development and chemical manufacturing projects to take place in the Mountain State over the next 20 years.
The players in the agreement include Chinese state-owned mining and energy company Shenhua Group and power producer China Guodian Corporation, which merged earlier this year to create what some reports call the “world’s largest utility provider by capacity,” with estimated combined assets of over $200 billion and over 200,000 employees. Recently, China and its energy sector have pushed to merge strong companies with less performing entities to solve overcapacity issues. This investment by China Energy was its largest to date. The group has several other investments with corporations in other U.S. states totaling over $250 billion.
This isn’t the first time West Virginia has gotten involved with a company from China. West Virginia University and Shenhua Group have been working together since 2002 researching a process that converts coal into liquid fuels. Just last year, the two sides signed an agreement to make West Virginia the top priority area for Shenua’s U.S. investment strategy, and on Thursday WVU’s Energy Institute Director Brian Anderson called this memorandum “a game changer for the state.”
China Energy says it selected West Virginia because of its geographical position and its status as a key energy producing state, recognizing that the region has one of the largest shale gas reserves in the country. Secretary Thrasher notes that West Virginia is no stranger to seeking foreign investment in an effort to improve its economy, having welcomed companies like Toyota and Hino Motors in the past.
U.S. Representative David McKinley R-W.V., says, “The investment in shale gas resources located here in West Virginia will spur tremendous economic growth in our communities.” He adds high praise for Secretary Thrasher’s dedication to creating opportunities that bring new jobs to the state.
Although it’s too early to report any tangible progress with the project, enthusiasm throughout the state is apparent. It’s a project worth keeping an eye on. If you have further questions on President Trump's energy deals, contact us.