President Donald Trump will visit Beijing in November as the Chinese oil giant Sinopec considers significant investments in the U.S. Gulf Coast oil industry, Reuters reports.
Trade between the United States and China is expected to be a significant part of Trump’s visit, including facilitating partnerships between Chinese and American companies.
China’s state-owned oil company may partner with two U.S. companies, commodities trader Freepoint Commodities LLC and private equity firm ArcLight Capital Partners LLC, to complete projects that would boost American crude oil exports to Asia, according to Reuters.
One project is a new pipeline running between the Permian Basin oil field in Texas and oil export terminals along the Gulf Coast. The companies would also construct a new terminal on the coast capable of loading 2 million barrels of crude oil onto a Very Large Crude Carrier (VLCC).
The companies are also looking at expanding oil storage facilities in terminals on the U.S. Virgin Islands.
The projects would boost oil exports to Asia, as well as chip away at the trade deficit between the U.S. and China, according to Reuters.
The added infrastructure would make room for the United States’ booming oil export business. A ban shipping most crude oil out of the U.S. was lifted two years ago, leading to huge growth in the sector.
That growth, however, has some in the industry concerned that infrastructure in the United States won’t be able to keep pace with production as oil companies pump about 800,000 to 1 million barrels per day more crude annually. Without building and expanding infrastructure such as pipelines and export terminals, bottlenecks may develop in the system buy 2022, Reuters reports.
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