Shell plans to spend about $1 billion annually over the next five years on the shale gas projects in China and plans to drill about 17 wells, including probes for tight gas and shale gas, in regions including Sichuan, China’s most prolific gas province.
- Inspired by the massive success of unconventional gas – coal seam methane, tight gas and shale gas – in the US , China over the past year embarked on an exploration campaign for shale gas, part of Beijing’s goal to boost use of cleaner burning fuel and cut coal.
- China does not have any shale gas production yet, but Shell has a rough target to pump some 10 per cent of its total gas output from shale gas by 2020.
- Petrochina and Shell drilled the first evaluation well on the Fushun block in the Sichuan province of southwestern China. The Fushun block occupies an area of about 4000 sq km.
This happens to be the first joint shale gas development project signed by the two companies with an intention to explore the untapped resources in China.The project is expected to assess China’s shale gas potential and capture the unconventional source of cleaner-burning fuel to meet that country’s increasing demand for fuel.
This is not the first time when PetroChina and Shell jointly landed on a gas development project in China. They also share a deal at Changbei natural gas field in the Shaanxi province of China. Also, Just a year ago, Shell and China National Petroleum Corp (CNPC), parent of PetroChina, signed a 30-year deal to develop another tight-gas block in Sichuan province.
China lags the U.S. in terms of development of shale gas, which is a foremost contributor to future energy mix. Will US's success in the unconventionals be replicated by China? .... its too early to comment!!!