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Friday, 8 July 2011

China's shale gas play may reduce LNG, pipeline gas imports: analysts



Singapore (Platts)--7Jul2011/523 am EDT/923 GMT

China's appetite for LNG and pipeline gas imports over the coming decade could be reduced with the development of shale gas and other unconventional gas in the country, much like in the US where shale gas was a game changer, analysts from Bernstein Research said in a report Thursday.

Imports will face stiff competition from the economically more attractive shale gas, even though development costs in China would surpass those in the US, the analysts said.

Shale gas development is in its infancy in China, with the country's two oil majors, PetroChina and Sinopec, expected to produce 3 billion cubic meters by 2015, less than 2% of total domestic gas production.

"Exploration is at the early stage and it will take time to prove up resources and devise a commercial development plan. Moreover, there is still a large volume of conventional 'tight' gas to develop first," the Bernstein analysts said in the research report. 

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