Talks to help develop shale gas

Talks of increasing cooperation in the shale gas sector in the current Sino-US dialogue are expected to further tighten carbon emissions reduction ties between the world's two biggest economies, industrial experts said.

Carlos Pascual, the US State Department's special envoy and coordinator for international energy affairs, said that the US will focus in energy talks at the China-US Strategic and Economic Dialogue on how it can help develop China's shale gas, the Dow Jones newswire reported. The two-day talks began on Thursday.

Pascual said US oil giants such as Exxon Mobil could benefit from partnerships with Chinese companies in developing the unconventional fuel source in China, Dow Jones reported.

The two nations have common interests in climate change partnership, in which clean energies, particularly shale gas resources, will take the lead, said Zhou Qi, a researcher at the Institute of American Studies at the Chinese Academy of Social Sciences.

She said that talks on shale gas will help more private US companies, which own the advanced shale gas technologies, to invest in the Chinese market. That, in turn, could increase opportunities for mergers and acquisitions in the sector.

China is estimated to have 25 trillion cubic meters of shale gas reserves, according to the Ministry of Land and Resources. The exploitable reserves of the gas are expected to reach 200 billion cubic meters by the end of 2015, the world's largest accessible reserves of the gas.

China has the goal of getting up to 12 percent of it total natural gas production from shale gas by 2020. It has ratcheted up its efforts to explore the fuel source by setting a target to produce 6.5 billion cubic meters of shale gas a year by the end of 2015. It hopes to produce 60 billion to 100 billion cubic meters a year by 2020.

China, the world's leading energy consumer, drilled 50 shale gas wells in the past year, but it has yet to announce any commercial production.

The 12th Five-Year Plan (2011-15) period is a preliminary stage, laying the foundation for the shale gas sector in China after 2015, Liu Tienan, head of the National Energy Administration, said in March.

The country's top oil conglomerates, including China National Petroleum, China Petrochemical and China National Offshore Oil, have joined forces with several foreign oil giants to explore shale gas in China, which is estimated to have the world's largest reserves of the fuel.

Global companies including Royal Dutch Shell, Exxon Mobil and Chevron are participating in the sector, which is still in its infancy in China.

China National Offshore Oil and China Petrochemical, which are keen to harness the latest cutting-edge technologies in the US, also purchased shares in US shale gas blocks in recent years.

"Most of the current action in the sector is corporate. We expect more concrete government-to-government partnerships to spur the quick growth of shale gas in China," said Pan Jiping, a researcher at the Ministry of Land and Resources.

zhouyan@chinadaily.com.cn