Shell's Chinese Shale Project Development to Start in 2014

Royal Dutch Shell said its shale gas project in China will require billions of dollars in investment from 2014 before it can supply the domestic market.

Bloomberg reported that along with China National Petroleum Corp., Shell plans to take a final investment decision by the end of next year after carrying out exploration work at the Fushun-Yongchuan block in the Sichuan basin.

The partners have so far drilled 24 wells and plan a further 14 next year, said Maarten Wetselaar, executive vice president of Shell Upstream International. “Before you have serious shale gas production you need hundreds of wells,” Wetselaar said in an interview to Bloomberg this week.

Shell operates the Changbei gas field, its largest production project in China. In July, Shell and CNPC agreed on the new development phase for the field to increase pumping from a current plateau rate of 320 million cubic feet a day of tight gas, which is difficult to recover.