China Buys Into North American Shale Gas
After two major deals with North American shale plays took place last week at the hands of three Asian sovereign wealth funds as well as India’s Reliance Industries, China is throwing its hat into the ring announcing an initial agreement with Canadian shale developer Encana.
Over the past year, the Chinese government has been aggressively pursuing alternatives to crude oil, asking for natural gas to account for 10 per cent of the nation’s energy mix by 2020. It currently accounts for around 4 per cent.
In lieu of inviting foreign investors to China to extract the gas, however, Chinese state companies have pushed for a more independent approach wanting to extract, develop and sell the unconventional gas themselves.
These companies in turn have begun investing in companies familiar with hydraulic fracturing technologies and horizontal drilling methods – like Encana – in order to gain the knowledge of how to access this rich resource on Chinese soil.
“China is playing catch up to Asian rivals in the race to buy into North America’s shale gas sector,” an article published on Rigzone.com says, “underlining how the world’s second-largest energy consumer is waking up to the potential of a technology that could unlock a massive resource at home.”
Source: Natural Gas for America