China has already got a lot of what was American industry. With this it might get a big slice of Europe's too
With China having put shale gas near the top of the government agenda for energy security concerns, the scramble for this game-changing unconventional gas is gathering momentum.
The Ministry of Land and Resources said that more than 70 companies have shown their interest in participating in the country's much talked about second tender for domestic shale gas blocks, which is estimated to kick off this month or next.
China opened four blocks for the first round bidding to selected State-owned companies last June. China Petroleum & Chemical Corp and a provincial coalbed methane company won the bid for two blocks.
Compared with the first auction to test the water, the second one may offer about 17 blocks, located in areas including the provinces of Hunan and Anhui, for bidding, said Jiang Xinmin, deputy director of the Energy Research Institute, a think tank of the National Development and Reform Commission.
The ever-growing shale gas fever in China, buoyed by the United State's revolutionary breakthroughs in the sector, has turned the new sector that has yet to take off into a new gold rush for companies in the country.
Even domestic property companies, which have generated the biggest number of billionaires in recent years before they started wobbling on the government's tightening policies, are considering seeking a share.
Li Jun, board secretary of Zhongtian Urban Development Group Co, flew almost 2,000 kilometers from the southwestern city of Guiyang to the eastern costal city of Shanghai just to attend a shale gas forum held in the city in July.
"It's not a gamble. We hope to leverage the cash earned from the property market to invest in the energy arena," Li said. Zhongtian is a local real estate developer in Guizhou province with total assets of 15 billion yuan ($2.4 billion), according to its website.
State-owned companies strictly control the energy industry so shale gas may be the last resort for privately held companies to participate in the lucrative sector, Li said.
The Ministry of Land and Resources said in May that Chinese companies with more than 300 million yuan of registered assets and survey licenses for natural resources, among others, are allowed to tender.
Zhang Dawei, head of the oil and gas strategy center of the ministry, reiterated several times in public that private investors are allowed to bid to diversify the investment bodies. Guanghui Energy Co, a privately held natural gas pipeline operator based in Xinjiang Uygur autonomous region, for instance, has shown its strong interest in shale gas exploration.
"We will definitely apply for the second auction but the government has the final say on whether we can squeeze in," said Wang Yuqin, board secretary of Shanghai-listed Guanghui.
Shale gas is a clean and efficient energy trapped within shale formations. China is estimated to have 25.1 trillion cubic meters of exploitable shale gas resources, exceeding the 24.4 trillion cu m in the United States, making it the world's biggest. If all gas can be extracted from the shale, it will able to meet natural gas demand for the world's second biggest energy consumer for two centuries.
China produced more than 103.1 billion cu m of natural gas last year with 7.3 percent year-on-year growth. Apparent consumption - production plus imports minus exports - was 129 billion cu m in the same year.
It topped the world with its 22 percent year-on-year growth in natural gas demand last year, with increasing Chinese production, imported pipe gas and liquefied natural gas supplies, according to the BP Statistical Review of World Energy.
China's natural gas consumption will be doubled within the 12th Five-Year Plan period (2011-2015) to account for 8 percent of its total energy mixture by the end of 2015 from 4 percent now, said Jiang, from the National Development and Reform Commission. He added that the development of shale gas is a strategic move, given China's ever-growing shortage of natural gas.more here -
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