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Houston — West Virginia officials are still hopeful that China Energy will eventually make good on its promise of investing $84 billion in the state's natural gas and petrochemical industries, despite the ongoing US-China trade dispute, the state's secretary of commerce said Monday.

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Following a visit to Beijing by a group of West Virginia officials last month, "we understand what China Energy is about," Secretary Ed Gaunch said in an interview Monday. "From my standpoint, we've moved the relationship further ahead."

This relationship concerns a memorandum of understanding that China Energy had signed in November 2017, during a visit by President Trump to Beijing in the early days of his administration. In that MOU, China Energy had said it hoped to invest up to $83.7 billion in shale gas development and chemical manufacturing in West Virginia over a 10-year period.

The terms of that agreement have never been made public, and since that initial announcement, the giant Chinese energy company has not made any discernible moves to make good on its commitment. The possibility of the investment ever taking place has further been called into question by the trade tensions between the US and China that have risen substantially in the months since the deal was first announced.

Nevertheless Gaunch was optimistic about the possibility of future Chinese investment in the state's midstream gas and petrochemical industries. "At some point in the not-too-distant future we are hopeful that they will announce a project or more than one project."

The visit of the trade delegation to China is just the latest contact between representatives of China Energy and West Virginia's state officials and industry representatives."They've been here 22 times over the last 22 months," he said.

Gaunch acknowledged that the MOU does not commit the Chinese energy company to any specific midstream natural gas or petrochemical manufacturing projects, although he said discussions have focused on storage-related projects.

"The MOU is so general. It's hard to put a finger on exactly what they're talking about," he said. From the standpoint of the West Virginia delegation, Gaunch said state and industry officials are focused on taking advantage of the state's bounty of "wet gas" to develop a local petrochemical storage and manufacturing industry.

ONGOING TRADE DISPUTE

Gaunch said the ongoing trade dispute between the US and China has hampered discussions over the potential for Chinese investment in West Virginia.

"For certain it is impacting the situation. We discussed it numerous times," he said. Their Chinese hosts told members of the trade delegation that the impasse between the two countries was making it difficult for China Energy to make a decision to deploy their resources.

But that issue might be nearing a resolution as President Trump, speaking on the sidelines of the G20 meeting of world leaders in Japan Saturday, announced he would forego imposing additional tariffs on Chinese imports, indicating a possible truce in the months-long trade dispute.

In the meantime, Gaunch said the trade delegation trip, which also included a stop in Japan, moved the ball in promoting increased trade relations between that nation and West Virginia.

Currently 21 Japanese companies have substantial investments in West Virginia in various industries, including metal processing and the automotive industry. "We visited with many of those companies about potential new prospects."

Regardless of whether or not the China Energy investment is ever made, West Virginia and the larger Appalachian Basin region remain the focus of Asian countries interested in investing in the growing energy and petchem industries, Greg Kozera, marketing director of Shale Crescent USA, said Monday.

Shale Crescent USA, which is trying to spur the creation of a petrochemical storage hub in the tri-state region of Pennsylvania, West Virginia and Ohio, has received a number of inquiries about the project from Asian nations outside of China, Kozera said. "There's a lot of other folks we're talking to," he said.

-- Jim Magill, jim.magill@spglobal.com

-- Edited by Valarie Jackson, newsdesk@spglobal.com