HONG KONG -- As Washington and Beijing's tit-for-tat measures in their ongoing trade war continue to escalate, a major Chinese state-owned energy conglomerate has said it will honor the $83.7 billion shale gas deal agreed with the U.S. state of West Virginia last fall.
Ling Wen, president of China Energy Investment, told reporters on Monday that the contract he signed during U.S. President Donald Trump's visit to China last November was moving ahead as planned. The project was a central part of the $250 billion-worth of deals agreed between the two countries. The size of the West Virginia project, which will last for the next two decades, was more than the state's gross domestic product last year.
"We and the West Virginia government, and other related companies have always been extremely aggressive in pushing forward this project," Ling said, adding that they had "already made gradual progress," without elaborating further. He also stated that "both sides have kept very close contact with each other ever since, and what has been reported in the media, such as we stopped our mutual engagement or cancelled our trips -- was not true."
China Energy is one of the country's so-called central companies, meaning the top 96 large-scale state-owned enterprises directly controlled by the cabinet level State-owned Assets Supervision and Administration Commission, or SASAC. The company was established last August through a merger of two central companies, China Guodian and China Shenhua Group.
Ling was speaking to the media during Monday's half-yearly earnings briefing for the group's Hong Kong-listed arm China Shenhua Energy, of which he is chairman.
Ling admitted that the ongoing and escalating conflict between the U.S. and China would "definitely bring about certain impacts to the economic and trade dealings" between the two countries.
However, he hoped that the overall direction of bilateral relations and the prospects for economic cooperation would inevitably move in a positive direction.
As president of China Energy Investment, he stressed the shale project "will be aggressively and soundly pursued under the principle of profit maximization."
Ling is a members of the Chinese Communist Party, and doubles as deputy secretary of the party cell in China Energy as well.
Another Chinese state-owned energy conglomerate said on Monday that it was business as usual for its own dealings in the U.S. Sinopec, who has stakes in U.S. shale gas operators, is importing crude oil from America, "in accordance to our long-term contract," said Vice President Huang Wensheng. During its half-year earnings briefing in Hong Kong, he confirmed that the "import is proceeding normally."
Sinopec, one of the largest oil refining companies in the world, processed 239 million tons of oil last year, 85% of which was imported. For Sinopec, it is natural and safe to diversify its import sources, "the U.S. being one of them," said Huang.
However, a strategy of diversification risks running into trouble from time to time. Sinopec is also a long-time buyer of Iranian oil. With the U.S. recently announcing the resumption of sanctions on the Middle Eastern country, Huang admitted that if imports from Iran were stopped, the company's refining would be affected. The only thing Sinopec could do at this point was "pay close attention" to how the situation evolves, he said.