CHARLESTON, W.Va. — Gov. Jim Justice and Commerce Secretary Woody Thrasher, speaking for about an hour at a news conference Monday morning, described a natural gas deal with China Energy as an enormous opportunity for West Virginia economic development but provided few specifics about what’s ahead.

“I don’t want to get into the specifics of the projects,” Thrasher said. “They do encompass the whole chain of processes that are involved in providing value-added petrochemical products, and there’s a whole wide series of projects.”

The two said the $83 billion agreement announced last week in Beijing lends itself to a variety of projects in the petrochemicals sector but said they could not expand on details because of confidential aspects of the deal. Thrasher said the projects are likely to evolve over the 20-year life of the memorandum of understanding.

“Who in the world can even begin to describe what $83.7 billion of money investment is,” Justice said. “Well, I’ll tell you what it is. Do you realize that’s eighty three thousand, seven hundred million dollar investments. Now just think about that. For crying out loud, it absolutely takes your breath.”

Asked to provide examples of any incentives the state provided as part of the deal, both the governor and the Commerce secretary said that China Energy had not asked for any incentives up front.

Both Justice and Thrasher said the opportunity arose and was accomplished quickly. They described it coming together mostly through persistence and relationship building.

The state Department of Commerce announced overnight Thursday an agreement with China Energy to invest $83.7 billion in shale gas development and chemical manufacturing projects in West Virginia.

The agreement was the biggest among several deals signed during President Donald Trump’s state visit to Beijing. The total value of the agreements stemming from Trump’s trip could reach $250 billion, Reuters reported.

Woody Thrasher

Thrasher signed a memorandum of understanding with China Energy President Ling Wen Thursday as Trump looked on.

Some national energy analysts cautioned that agreements such as a memorandum of understanding would represent a less firm commitment than a contract and the actual amount being invested could dwindle.

China Energy officials had made several trips to West Virginia and the memorandum represents the first of several expected commitments by the company, the Commerce Department said.

This particular opportunity arose about March, Thrasher said Monday, with the possibility of visiting Asia to build on relationships the state already had. Thrasher said he spent about a week in China and another week in Japan at that time.

Then about a month ago, a group Thrasher had met during his visit to China came to West Virginia. The group represented Shenhua Group, which merged this year with China Guodian, to become China Energy — the largest energy producer in the world.

He said those representatives told him they were looking for ways to respond to President Trump’s challenge to even out a trade imbalance with China. Thrasher said the group told him, “We have interest in outlining up to $80 billion in projects within the petrochemical industry.”

Thrasher said his response was, “That’s terrific.” He said he and others from Commerce then set about putting together a list of projects that might be a match.

Then Thrasher went again to China and met with China Energy’s top leaders. “We specifically identified those projects we’re going to go forward with,” he said.

The very next week, Thrasher said, representatives of the company came back to West Virginia, visited project sites and delved into the specifics of investment. Thrasher said the goal was to announce the projects by the time of President Trump’s visit to China.

Then there was a bump.

About two thirds into the week, a Bloomberg news article described projects going forward in Texas, the Virgin Islands and elsewhere — but not West Virginia.

“And I sent that to the governor, and the governor made it abundantly clear to me that these projects cannot slip away,” Thrasher said. “He not only made it clear to me, he made it abundantly clear to the (federal) Commerce Department and the Department of Energy.

“Thanks to the governor picking up the phone and communicating with the Department of Commerce and the Department of Energy, West Virginia’s position on those projects was again elevated to the very top of that list.”

Justice agreed with that account.

“We got to crunch time and we almost lost it,” he said.

“Lo and behold, look what we have. For once, West Virginia’s not standing there holding the bag with nothing in it. We’ve got a real opportunity.”

Brian Anderson

Brian Anderson, director of the WVU Energy Institute, said the opportunity centers on taking raw materials from the Marcellus and Utica shales, stripping out the energy portion and having natural gas liquids as the building blocks for polymers and plastics.

“What we have in West Virginia is the chance of a lifetime where those natural gas liquids that we have in our region are the lowest cost raw materials on the face of the planet for the entire manufacturing sector,” Anderson said.

“So what this opportunity in front of us is is taking those raw materials and adding value to manufacture goods that citizens use every day, whether it’s diapers, plastic bottles, toys or the automotive components currently being built into our automotive sector to lightweight our vehicles.”

Anderson, as he has other times in recent days, emphasized the possibility of a natural gas storage hub that would serve as a resource for manufacturers.

“One component of the investment can potentially be the Appalachian storage hub that would create that value chain,” he said.

 

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