February 13, 2020 / 2:31 PM / 2 months ago

U.S. highlights potential risks from China's EDP stake

LISBON (Reuters) - The United States would like to see Portugal’s main utility EDP-Energias de Portugal expanding in the U.S. market, but Chinese investment in the company could pose risks that need to be evaluated, U.S. energy secretary Dan Brouillette said on Thursday.

FILE PHOTO: U.S. Secretary of Energy Dan Brouillette visits the LNG (liquefied natural gas) terminal at the port of Sines, Portugal February 12, 2020. REUTERS/Rafael Marchante/File Photo

Brouillette, in Portugal to attract American investment to the deep-sea port of Sines, said: “We are evaluating Chinese investment in EDP,” Brouillette said. “The ultimate outcome of this is going to depend on EDP, on whether they are willing to mitigate some of that risk.”

State-owned China Three Gorges (CTG) has a 23% stake in EDP.

He said EDP’s growth in the U.S. renewable energy market was welcome but did present a challenge because of the Chinese investment.

The same, he said, applied to Chinese investment in European and other allied countries, due to the risk it might allow their infrastructures “to be used for intelligence gathering purposes”.

“It hinders in many respects our ability to share critical information with our allies, so we take these things very-very seriously,” he said.

Brouillette said the United States was sharing its findings on “some of the incidents of Chinese activity in the United States” with its European allies. He said it was up to those allies to decide if there were any specific risks.

“The Europeans have their own decisions to make about companies like Huawei, about CTG, others who have invested in critical infrastructure in Europe,” he said.

Sines, south of Lisbon, is viewed as having a strategic location by the U.S. government. Brouillette said there was no U.S. pressure on the Portuguese government to pick a U.S. firm for the port’s expansion plans.

“We understand fully what the tender offer is about. If it ultimately ends up with the Chinese investor it is the decision the Portugal government will have to attend to in its own right,” he said.

“The purpose of my visit to the port is to attract U.S. interest and investment in that particular port because we see it as critical for moving not only gas but also other products into Europe.”

The American delegation included natural gas companies Cheniere, Venture Global LNG, Next-Decade and Penn America Energy, as well as construction companies and operators of container terminals - Ports America, Jacobs Engineering, Bechtel Civil Infrastructure and AECOM.

Reporting by Andrei Khalip and Sergio Goncalves. Editing by Jane Merriman

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