During President Trump's first state visit to China, officials from West Virginia and state-owned China Energy Investment Corp., the world's largest power company, signed an $83.7 billion memorandum of understanding (MOU) to develop shale gas and chemical manufacturing projects in the Mountain State.
West Virginia Department of Commerce (WVDC) Secretary H. Wood Thrasher and Ling Wen, a representative for China Energy, signed the MOU during a U.S.-China Business Exchange meeting in Beijing early Thursday, as Trump and Chinese President Xi Jinping looked on.
WVDC said the MOU represented the largest investment in a series of projects involving U.S. corporations and other states agreed to at the trade mission, which collectively totaled $250 billion. Another project to develop liquefied natural gas in Alaska at a cost of $43-60 billion was clinched by three Chinese firms and Alaska officials.
Under the 20-year agreement, China Energy potentially may develop power generation and chemical manufacturing projects in West Virginia, plus underground storage of natural gas liquids (NGL) and derivatives. WVDC said planning for the projects was already underway.
An MOU is not a formal contract but rather a nonbinding agreement outlining the terms and details of an understanding, including each parties' responsibilities. An MOUoften is the first stage in reaching a formal contract.
"This is a great day for the State of West Virginia. I've been saying for the last couple months that the tides are turning in West Virginia and this is proof," said Republican Gov. Jim Justice. He said the MOU could be "the largest investment in our state's history."
Thrasher said West Virginia "has actively sought direct foreign investment to strengthen and diversify our economy," and that other international firms that arrived before China Energy have been "solid corporate citizens," which have created jobs and supported communities in the state. "In that same spirit, we welcome China Energy and the mutual benefits our energy collaboration will bring."
WVDC said the state's business relationship with the Chinese company began in 2002, when Shenhua Group, then China's largest coal producer and the world's largest coal distributor, began joint research with West Virginia University on direct coal liquefaction technology. In 2014, Shenhua entered into a 50/50 joint venture with Energy Corporation of America to develop 25 horizontal wells targeting the Marcellus Shale in neighboring Greene County, PA.
Last August, the Chinese government restructured Shenhua Group and China Guodian Corp., a state-owned electric utility, into China Energy, creating the world's largest power company with more than 200,000 employees.
West Virginia's elected officials in Washington gave bipartisan praise to the potential plans.
"Expanding Appalachia's energy infrastructure, including developing a regional storage hub and market for NGLs, will have a transformative effect on our economy, our security, and our future," said Republican Sen. Shelley Moore Capito. "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."
The state’s Democratic Sen. Joe Manchin said he was "thrilled" that the MOU was signed. "I have always said that West Virginians are the hardest working people in the world," he said. "I'm glad China Energy recognizes this and is working with us to create jobs and economic growth in our state."
Rep. David McKinley (R-WV) added that the "investment in shale gas resources located here in West Virginia will spur tremendous economic growth in our communities."