Details Scant About $84 Billion China Energy Investment Deal in West Virginia
Details remain scant about a deal announced with China Energy to invest nearly $84 billion in the natural gas and petrochemical industries in West Virginia during the next 20 years. The deal, which makes up roughly a third of China Energy’s total proposed investments across the country, came during President Donald Trump’s visit last week to Beijing.
Governor Jim Justice and state commerce secretary Woody Thrasher held a press conference Monday to outline how the deal came about, but didn’t provide specifics about the memorandum of understanding, or MOU, between Chinese industry leaders and West Virginia government officials.
Thrasher revealed last week that early projects would include two natural gas-fired power plants, likely in Harrison and Brooke counties, with construction potentially starting in the next six to eight months. He and officials from the Shenhua Group, who are part of the state-owned China Energy company, have agreed at this point to not release additional projects or the MOU, which is understood to not be legally binding.
“I don't want to get into the specifics of the projects," said Thrasher. "There's a whole wide series of projects. Can I guarantee you that they're going to spend 83 billion dollars in 20 years? No. But what I can guarantee you is: the governor has directed me to do everything within my power to facilitate these projects going forward.”
WVU Energy Institute director Dr. Brian Anderson added that potential projects would run the entire spectrum of natural gas and petrochemical products and facilities. He did mention interest in building an underground storage hub for natural gas liquids, which he says would link to production facilities through pipelines.
“When the the value chain of the petrochemical industry from the natural gas liquids would start with the necessary, fundamental framework infrastructure that would support that petrochemical sector," said Anderson. "And so one thing that Texas does have that West Virginia doesn't is a storage and trading hub for these natural gas liquids. It creates a spot market for the efficient trading and pricing of those natural gas liquids.”
Secretary Thrasher noted that China Energy’s interest in West Virginia had waned at various points in the negotiation process, with investors considering locations in Texas or the U.S. Virgin Islands.
Both Justice and Thrasher say that the state has offered nothing in exchange for the investment or been asked to provide tax breaks, changes in policy or any other incentives at this point.
“President Trump is on their you-know-what over there and everything. And he's demanding that we get our trade to bounce back and balance. They asked for nothing," said Justice. "Now, would we surely afford them the incentives that we afford to others within our state? Absolutely, we would. But at the same time, thus far, I can tell you they've asked for nothing.”
With some details of the agreement unclear to the public and nothing legally binding as of yet, Justice urged a sense of cautious optimism moving forward.
“We want to be realistic," said Justice. "We want to absolutely believe that it's happening. But, at the same time, we don't want to just drop all of our guards and think, 'Yeah, yeah, it's done, done.'”
Thrasher said there is a schedule moving forward to solidify potential projects and that he expects to see construction beginning by this time next year.
Both he and Justice attribute the potential investment to Justice’s relationship with President Trump and Trump’s interest in reviving West Virginia’s economy.