China outlines shale gas ambitions

By Malini Hariharan

With all the buzz around shale gas in the US the blog is not surprised to read that China is also turning to this unconventional source of gas.

The country is looking to start shale gas production within the next five years, said a senior government official. It has drilled more than 10 wells and signed several cooperation agreements with foreign companies to develop more.

China National Petroleum Corp has completed its first horizontal shale gas well after 11 months of drilling. And the company is working with international majors such as Shell and Chevron on exploration and production.

China has also been busy gathering expertise to tap this resource. State-owned companies have already invested over $6bn in North American shale gas assets in the last three months, six times the figure for the whole of 2010.

And there is plenty of shale gas that the country can tap. In a recent report on shale gas resources outside the US, the Energy Information Administration (EIA) estimates that China has about 920 trillion cubic feet of potential shale-gas resources.

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Source: EIA

The report assessed 48 shale gas basins in 32 countries and concluded that international shale gas resource base is vast.

If shale gas is added to other gas resources then the world’s technically recoverable gas resources increases by 40% to 22,600 trillion cubic feet, said the EIA.

Prospects for natural gas, especially shale gas, have brightened after Japan’s nuclear disaster. If the US can overcome all the environemental challenges surrounding shale gas then it is only a matter of time before other countries start developing their resources.

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