Alaska and West Virginia have welcomed investment from Chinese entities to develop US shale resources
The attractiveness of US-based shale gas to China is evident in two deals brokered between Chinese entities and the US states of West Virginia and Alaska, when US president Donald Trump and Chinese president Xi Jinping met in China on 9 November. Both states are home to large shale gas reserves, and the agreements are part of the business exchange trade mission that aims to enhance relations between China and the US.
China Energy, recently formed through a merger of state-owned coal mining company Shenhua Group and energy producer Guodian Group, plans to invest $83.7 billion (£185 billion) in shale gas development and chemical manufacturing projects in West Virginia. These projects will proceed in phases over a 20-year period, and will focus on power generation, chemical manufacturing, and underground storage of natural gas liquids and derivatives. The West Virginia department of commerce noted that the plans demonstrate ‘a total value chain approach’, integrated from raw materials through to local production of useful chemical intermediates.
Meanwhile, an agreement between China’s state-owned oil company Sinopec, the Alaska Gasline Development Corporation, the state of Alaska, a Chinese bank, and a Chinese investment firm to advance the $43 billion Alaska LNG natural gas pipeline megaproject. The LNG project aims to move natural gas from Alaska’s North Slope to its southern coast, where it would be liquefied and exported. The goal is to firm up project plans by the end of 2018, and begin production in 2024–5.