Chinese Investment in US Shale Project in Doubt: Report

Escalating trade war between the US and China has put a proposed shale gas project in West Virginia in jeopardy.

Last November, China Energy Investment Corporation signed a memorandum of understanding with West Virginia for a framework to invest $83.7bn in shale gas development and chemical manufacturing in the US state. The non-binding agreement was signed during US president Donald Trump’s visit to China.

Latest media reports suggest that China Energy officials have now cancelled a scheduled trip to West Virginia to discuss the investment plans. According to Brian Anderson, director of West Virginia University’s Energy Institute, announcements about the first project to be built under the proposed deal was to be made during a petrochemical conference in Pittsburgh June 18. However, China Energy officials cancelled their trip to the two-day conference because of tensions between the two governments over an ongoing trade war between the two countries, reported WVNews June 21. Last week, the US government announced an additional $50bn in trade tariffs on Chinese goods and has threatened to impose further tariff.

Anderson said he was told by China Energy officials three weeks ago they would not be attending the conference. “It’s to be expected. The company is still a majority state-owned enterprise,” WVNews quoted Anderson saying. China Energy was created by merger of China’s state-owned coal mining company Shenhua Group and energy producer Guodian Group. The company is the world’s largest power company.

However, Anderson added that all this doesn’t necessarily mean the China deal is dead. “I’m still optimistic,” he said. “They’re not really pulling out of it at all. There’s policies and politics, and if policies are in place, you can still crunch the numbers.”