ROYAL DUTCH Shell has found shale gas in China, a development that could cap imports in a market natural gas producers are hoping will drive demand.
An official with Shell’s partner, PetroChina, a unit of the country’s top energy group, state-owned CNPC, said drilling results from two wells Shell drilled had been positive.
“Shell has two vertical wells and they got very good primary production,” Prof Yuzhang Liu, vice-president of Petrochina’s research institute of petroleum exploration and development, said in an interview at the sidelines of the World Petroleum Congress (WPC) in Doha.
“It’s good news for shale gas,” said Prof Liu, who regularly represents PetroChina at industry events around the world.
China currently has no commercial shale gas production.
Some industry executives doubt the explosion of shale gas in the US that has revolutionised the market there could be replicated elsewhere due to difficult geology, the lack of water availability or land access issues.
Prof Liu accepted the rock formations in China were “different” from those in the US, but denied this meant they were more challenging or less bountiful.
In less than a decade, shale gas has transformed the US from gas shortage to a point where companies are planning to export liquefied natural gas (LNG), fundamentally altering the dynamics of the international gas market.
LNG projects freeze and squeeze natural gas into liquid for export in tankers. Many producers who were targeting the US were forced to rethink their plans, and China, with its booming energy demand, was seen as the answer to their need for a market.
A Chinese “shale gale” as the revolution was termed in the US, could jeopardise that market.
Shell declined to confirm the find but said in a statement: “Shell will complete drilling activities by the year end...as planned.”
Chief executive Peter Voser has previously said he has “great expectations” for Chinese shale but was cautious in his comments to the WPC yesterday.
“We are going through the exploration phase there and are exactly now analysing what potential is available in China,” Mr Voser told a news conference. – (Reuters)
