China Huadian Group Forms Shale JV

Huadian New Energy, a wholly-owned subsidiary of China Huadian Group, has entered into an agreement with Huadian Engineering, being a subsidiary of Huadian, Jiangxi Coal Group and Jiangxi GME Institution, to establish Jiangxi Shale Gas.

Jiangxi Shale Gas will be owned 10% by Huadian New Energy, 34% by Huadian Engineering, 46% by Jiangxi Coal Group and 10% by Jiangxi GME Institution. The new venture shall be involved in exploration, development and sale of shale gas and the construction of piping network.

The move comes as China is aggressively inviting private players to develop its vast shale gas resources. The country is likely to hold the second round of shale gas license auction later this month. This round will offer 20 shale gas blocks, with a total area of 20,002 square kilometres in 8 provinces.

The government is also planning to provide fiscal a tax incentives to spur the country's shale gas exploitation as part of efforts to optimize the country's energy consumption structure.