11 January 2013 11:32 [Source: ICB]
The shale gas revolution offers huge opportunities for petrochemicals, not only in the US but also elsewhere in the world.
One day, China, which, according to the US Energy Information Administration has the world's largest shale-gas reserves, might make use of the technology.
China aims to work with the US to develop drilling techniques
In China's Sichuan province, in the South China Basin where many of its reserves are located, gas reserves are said to contain high amounts of corrosive and potentially lethal hydrogen sulphide. Some of the shale reserves have only one-third of the thickness of a typical US shale deposit and two to three times lower porosity, according to PetroChina.
The country's shale-gas fields are also situated in mountainous regions, making drilling a challenge while increasing the cost of building roads, bridges, pipelines and other infrastructure.
Interestingly, the US is prepared to partner with China in its effort to exploit its shale gas potential through the US-China Shale Gas Training Program, which has been launched by the independent White House agency, the US Trade & Development Agency (USTDA).
An initial $378,000 (€291,060) will be invested to enable the US industry to travel to China and "help introduce Chinese energy sector officials and project sponsors to US shale gas best practices, policies and technologies".
According to Tony Regan of the Singapore-based energy consultancy Tri-Zen, the motive behind the initiative is commercial rather than geopolitical.
"There are a lot of government-to-government connections between the US and China over shale gas," he said. "This is being driven by collaboration between, say, a university in the US and one in China to develop new shale-gas techniques that will be commercialised and, hopefully make money for companies in all three countries, while solving China's shale-gas problems."
A March 2012 Barclays Capital report said China had set itself a target of producing 6.5bn cubic metres (bcm) per year of gas by 2015, accelerating to 60 -100 bcm/year by 2020.
But since then, the target, set by the country's Ministry of Land, has been drastically reduced. The Ministry now expects only 3-5 bcm to be produced by 2015 and 15-30 bcm by 2020, said Regan. "China shale is likely to take more than 10 years to become commercially significant because of all these issues."
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