China Energy Investment signs MOU for $83.7 B in West Virginia projects
BEIJING (Reuters) — China Energy Investment Corp, the world's largest power company by asset value, has signed a memorandum of understanding (MOU) to invest $83.7 B in shale gas, power and chemical projects in West Virginia, the US state said on Thursday.
The agreement was the biggest among a slew of deals signed during US President Donald Trump's state visit to Beijing. The total value of the deals done during Trump's trip could be as much as $250 B.
The gas and power agreement marks the first overseas investment for newly founded China Energy, which formed from a merger of China Shenhua Group, the country's largest coal producer and China Guodian Corp, one of its top five utilities.
Beijing is supporting and encouraging its power companies to expand globally, and the agreement underscores China Energy's ambition to diversify into natural gas and the refining sector.
The touted investment would extend over a 20-yr period, covering projects for power generation, chemical manufacturing and the underground storage of LNG, West Virginia's Department of Commerce said in its announcement.
The deals will likely help create jobs in West Virginia and lift its economy.
West Virginia's gross domestic product declined 0.9% in 2016, reversing growth seen in 2015, according to the Bureau of Economic Analysis at the US Department of Commerce.
"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," said US Senator Shelley Moore Capito, West Virginia, according to the statement from the state's Department of Commerce.
With an estimated 326,00 staff, China Energy has a workforce almost four times bigger than the entire US coal-fired power industry for 2016.
The Chinese energy conglomerate has an installed capacity that tops 225 gigawatts, eclipsing major international rivals EDF and Enel.
China Shenhua Energy jumped 7.4% on the announcement to close at 22.05 yuan per share on Thursday.
Reporting by Meng Meng and Josephine Mason; Editing by Joseph Radford and Tom Hogue
The US Energy Information Administration (EIA) reported in April that the US set records for natural gas production in 2017.
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Since market reforms first started in 1978, China has shifted from a centrally planned economy to a market-based economy, experiencing rapid economic and social development.
Russia aims to ally with Qatar in LNG competition with Australia and other LNG-exporting majors over the coming years.
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