China’s Shale Gas Dream
From The Diplomat
By James Parker
As Anthony Fensom’s recent article on the U.S. underscores, knowledge of the vast potential of “unconventional oil and gas” has been spreading rapidly in recent years.
But, as Pacific Money has noted before, North America is not the only potential benefactor of this trend. In fact, China is believed to hold the world’s largest reserves of shale gas, with the Ministry of Land and Resources estimates the country has134 trillion cubic meters of shale gas with 25 tcm of this recoverable.
Coincidentally, China this week announced that 16 companies had won a second round of bidding to explore 19 shale gas blocks around central China in Henan, Hubei, Hunan, Guizhou, Jiangxi and Zhejiang provinces, as well as in the Chongqing area. The successful bidders were all domestic—14 state-owned firms and 2 privately-owned ones — and have agreed to invest 12.8 billion yuan (U.S.$2 billion) over the coming years.
Given the limited extraction capability of Chinese firms, this will exacerbate the already immense challenges China faces in extracting the natural gas and bringing it to market.
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