A new Chinese state-run oil and gas company says it is building “massive” infrastructure to supply the US shale gas boom.
The state-owned China National Petroleum Corporation (CNPC) said on Wednesday that it had purchased a 15-year supply contract for the “massive and necessary infrastructure project for the United States shale gas industry.”
The $9.6 billion deal is part of the company’s “massive infrastructure project” that will provide about 5 million tons of gas a year to US refiners and consumers.
It’s the first time the company has used the word “massive.”
“This is a very big deal,” said Jason Williams, an energy consultant at The Hill, a Washington-based think tank.
“It’s a massive infrastructure project.”
In recent years, China has been buying up land in western and central parts of the country to create more than a million acres of new farmland.
The land purchases have been controversial because of the risks to water quality and air quality in the regions.
CNPC says the project will be a major boost for US-China energy relations.
A pipeline is expected to be built between the new US-Mexico pipeline in eastern Texas and the existing Texas-Mexico oil pipeline.
The project will bring natural gas to the west coast of the United State.
A CNPC official told the Wall Street Journal that the purchase will help boost the economy and create jobs.
The company said the $9 billion deal will be fully financed by the government.