Shell to invest $1 billion annually in China gas projects
BEIJING -- Shell will invest around $1 billion annually in its upstream business in China to tap into the country' s surging natural gas demand,China Daily reported, citing the oil and gas giant' s chief executive officer. "There' s huge potential to come in terms of the natural gas market in China," was quoted by Peter Voser.
Shell currently has two gas blocks in southwest Sichuan Province, which it operates in partnership with CNPC.
The company has drilled 13 out of 21 planned wells in the Jinqiu block and will complete 21 by April 2013. The Jinqiu project achieved first gas production last September and currently has a daily output of 110,000 cubic meters. Meanwhile, Shell is still assessing whether commercial development at the Fushun Yongchuan block is viable, and drilling at the 15 wells could start by the end of 2012 , the report said, without elaborating.
Shell signed in March the first production sharing contract with CNPC to explore, develop and produce shale gas at the Fushun Yongchuan block. Last week, Shell said that it will invest more than $20 billion globally in natural gas projects by 2015.
Annual natural gas consumption in China is expected to rise to 230 Bcm by 2015, while supply will likely be above 260 Bcm, said Liu Tienan, the head of National Energy Administration, in late October.
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