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China natural gas deal may begin with new West Virginia power plants

CHARLESTON, W.Va. — West Virginia Commerce Secretary Woody Thrasher has revealed that the first projects in a blockbuster agreement between the state and China are natural gas power plants, likely one in Harrison County and one in Brooke.

Brooke and Harrison tentatively have been identified as the sites for the plants though the site selection process is ongoing, Thrasher later clarified.

Thrasher provided those details during a telephone interview from China with MetroNews’ Hoppy Kercheval.

Thrasher is in Beijing, China, where he signed a Memorandum of Understanding with China Energy President Ling Wen Thursday as President 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 wind up being less than originally described.

Thrasher, in the interview with Kercheval, said the power plant deals alone are valued at more than $1.3 billion. He said construction will begin within the next six to eight months.

“So I believe even if it doesn’t all come to fruition, the amount of investment with this company is going to be unprecedented,” Thrasher said.

ALSO READ: West Virginia announces $83.7 billion gas development deal with China Energy

ALSO READ: China deal is key to developing long-sought natural gas hub in WV

The agreement was the biggest among several deals signed during President Donald Trump’s state visit to Beijing.

Planning for the West Virginia projects is underway and will proceed in phases over the course of 20 years.

“This is the beautiful thing about this project,” Thrasher told Kercheval. “These are raw products that are from West Virginia, and they’re going to stay in West Virginia. The power generation projects are gas-to-power that will be power generation facilities located within West Virginia, constructed by contractors and with West Virginia employees.

“They’re going to be immediate. I think in the next six months they should be under construction.”

Overall, the projects that are part of the agreement will focus on power generation, chemical manufacturing and underground storage of natural gas liquids and derivatives.

“Every project they’re doing is a combination of investors,” Thrasher said. “In the case of the power plants they’re going to be United States-based owners, so they’ll be joint ventures.”

He added, “What it really does is build out the full chain of the petrochemical industry within West Virginia. These projects will take place over 20 years but significant money will be spent immediately and there will be a steady progression of in-flow to generate these projects.”

China Energy is the recent creation of a merger between China’s state-owned coal mining company Shenhua Group and energy producer Guodian Group. The merger positions China Energy as the world’s largest power company with more than 200,000 employees.

China Energy selected West Virginia for this project because of the State’s position as a key energy-producing state and home to one of the world’s largest shale gas reserves, underpinned by a longstanding relationship between the two entities.

West Virginia enjoys a strong relationship with China Energy, including ongoing research initiatives with West Virginia University. WVU and then-Shenhua Group began their relationship in 2002 with joint research on direct coal liquefaction technology.

“This is a game-changer for the state of West Virginia,” said Brian Anderson , director of WVU’s Energy Institute, in a statement provided by the university.

“By collaborating with global companies like China Energy to invest in our state through joint research, business development and demonstration opportunities, we begin to move West Virginia forward by expanding and diversifying our state into newfound prosperity and success.”

“Instead of sending jobs offshore, we are bringing hundreds of thousands of jobs stateside and directly into the state. Thanks to this strategic partnership, West Virginia is on the global stage. Now is the time to seize these business development opportunities that will help expand West Virginia’s energy market and provide cleaner, cheaper energy across the United State and beyond.”

Shelley Moore Capito

U.S. Sen. Shelley Moore Capito said the investment announced today is a direct result of a series of meetings and calls her office had with Energy Secretary Rick Perry and Commerce Secretary Wilbur Ross.

Speaking today on MetroNews’ “Talkline,” Capito said she has faith the deal in China will come to fruition because of the high-profile players involved. She said even if the long-term finances wind up only being a fraction of what was described today, that’s still an enormous amount.

“The numbers are just mind-boggling,” she said. “Let’s say the number doesn’t reach 83.7. Let’s say it only gets to $60 billion. I mean, come on.

“I think the Chinese are obviously trying to even the trade gap, work with the president here, so I think that alone really tips the scales in favor of this coming about.”

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