CHARLESTON — West Virginia and China Energy have signed a memorandum of understanding announcing a plan in which China would invest $83.7 billion in shale gas development and chemical manufacturing projects in the Mountain State.
State Commerce Secretary H. Wood Thrasher and China Energy President Ling Wen signed the MOU early Thursday morning in Beijing (just after midnight here), joined by President Donald Trump, Chinese President Xi Jinping, according to a news release from the state Department of Commerce.
The announcement of China Energy investment in West Virginia was the largest in a series of projects in U.S. corporations and other states which totaled about $250 billion, according to the release.
“West Virginia has actively sought direct foreign investment to strengthen and diversify our economy,” Thrasher said in the release. “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.”
The release said China Energy chose West Virginia because of the state's position as a key energy-producing state and home to one of the largest shale gas reserves along with a longstanding relationship between the two entities.
The state has had a relationship with China Energy, including research initiatives with West Virginia University. WVU and the then-Shenhua Group began a relationship in 2002 with joint research on direct coal liquefaction technology, the release said.
China Energy is the result of a merger between the state-owned coal mining company Shenhua Group and energy producer Guodian Group, positioning China Energy as the world's largest power company with more than 200,000 employees, according to the release.
The news release said the company has made several trips to West Virginia and the MOU marks the first steps in a series of projects China Energy plans to make in the state.
Projects will take place in phases over the course of 20 years, the release said. These projects will focus on power generation, chemical manufacturing and underground storage of natural gas liquids and derivatives.
“This is a great day for the state of West Virginia,” Gov. Jim Justice said in the release. “I've been saying for the last couple of months that the tides are turning in West Virginia and this is proof. Today is another sign as (West Virginia) joined with my good friend President Trump to announce the largest investment in our state's history.”
West Virginia's congressional delegation praised the agreement Thursday, all saying they felt it would spur economic growth in the state.
U.S. Sen. Shelley Moore Capito advocated for an investment in energy infrastructure with Trump, Vice President Mike Pence and Secretaries Rick Perry and Wilbur Ross. Capito and her staff also worked directly with the state Department of Commerce and the U.S. Department of Energy.
Capito called the agreement a “game changer.”
“The infusion of capital will take advantage of shale gas reserves in terms of building all kinds of things, whether it's power plants, chemical plastics or the ethane storage hub which I've talked quite a bit about is a real reality here,” Capito said. “The job impact and economic impact will be enormous.”
She has advocated for the development of an Appalachian natural gas liquids market and has led the effort to establish a regional storage and transportation hub in the region.
“The storage hub is critical here,” Capito said. “This is an $8 (billion) to $10 billion project. What it does is it keeps resources right here in our region so we can develop the crackers and the refining and the petrochemical industry. If you have it right here and have it close by, you can see what happens with growth. With Texas, they have a storage hub and we need one in the North-Central part of the state and region so we can capitalize off our own resources.”
Although no final agreement has been signed yet, Capito said she remains excited about the action.
“The signing occurred at the highest levels,” Capito said. “The presidents were there making these commitments with the state Department of Commerce and the U.S. Department of Commerce and all the geopolitics that go along with this makes me believe that this will lead to a final really, really good result. In other words, I don't think it's just for show.”
U.S. Sen. Joe Manchin praised the agreement.
“I am thrilled Secretary Thrasher and China Energy have signed the Memorandum of Understanding today in Beijing,” Manchin said in the release. “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.”
Congressman David McKinley said he believes the investment in shale gas resources will spur economic growth.
“Secretary Thrasher has been in constant contact with my office as his team has worked out the details for this project,” McKinley said in the released statement. “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.”
Congressman Evan Jenkins also released a statement following the announcement.
“I've always said that an energy economy is a jobs economy, and we now have a president who is embracing West Virginia's energy and jobs potential,” Jenkins said in the release. “This shows what we can do when we put our resources to work for us, and I thank Senator Capito, Governor Justice and Congressman McKinley for their leadership. I will work with our state and federal officials to ensure that this agreement will result in unprecedented job growth and investment in West Virginia.”
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