China signs deals with Alaska, West Virginia for shale gas

By Luke Geiver | November 14, 2017

China’s desire to utilize U.S.-based shale gas can now be clearly seen in Alaska and West Virginia. During his recent tour of Asian countries, President Donald Trump helped to connect Alaska and West Virginia—both states rich in shale gas resource deposits—with the China Energy Investment Corp. Through two separate multi-billion dollar deals, Chinese entities have made it clear they want to invest in and support the development and recovery of shale gas resources in Alaska and West Virginia while also helping to develop midstream and downstream shale gas infrastructure.

Through its $83.7 billion deal with the West Virginia Department of Commerce, the China Energy Investment Corp. will help spur the development of several projects over the course of the next 20 years. Projects will include power generation from natural gas, chemical manufacturing and storage (underground) of natural gas liquids and derivatives. According to West Virginia Gov. Jim Justice, the investment from China into the state’s shale gas future is the largest ever for the Mountain state.

“West Virginia has actively sought direct foreign investment to strengthen and diversify our economy,” said Wood Thrasher, commerce secretary for West Virginia, adding that, “the massive size of this energy undertaking and level of collaboration between our two countries is unprecedented.”

Through the 20-year partnership, West Virginia will work to develop a regional storage hub and market for NGLs, a large portion of which could be shipped and utilized in China.

According to the West Virginia Commerce Department, China chose the state due to its massive shale gas reserve. A pre-established partnership with West Virginia University also helped.

In Alaska, a major shale gas resource infrastructure development project that the state took over in 2016 could now have the partner—China—needed to help fund and fully develop the project. The Alaska LNG project could transport natural gas produced inland to the coast where it could be more accessible to markets in Asia, including China, the world’s number one use of LNG.

Through a five-party joint development deal that could give Alaska funding and development help and China access to a vast amount of natural gas, Alaska gained three Chinese partners: Sinopec, Bank of China and China Investment Corp. Sinopec, the state-run oil and gas company, generates $456 billion in annual revenue for China. The Bank of China is in the top five for the world’s largest banks and the China Investment Corp. is the third largest sovereign wealth fund.