Shell, CNPC to jointly seek shale gas in Sichuan Basin

Chinese shale may hold 36.1 trillion cubic meters of technically recoverable gas, or 12 times the country's conventional gas deposits, data from the US Energy Information Administration showed.

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China, believed to have one of the world's largest shale deposits, has drawn international heavyweights, including Shell, Exxon Mobil Corp and Total SA, to search for the unconventional gas, with Shell being the first to secure a production sharing contract.

The country plans to produce 6.5 billion cu m of shale gas by 2015, according to the industry's 12th Five-Year Plan (2011-15), the official blueprint.

Prospects for exploration have been rosier than expected, with daily output in some areas reaching 2 million cu m, the National Energy Administration said in January.

China Petroleum and Chemical Corp has vowed to mass-produce 5 billion c m of shale gas by the end of 2015, Chairman Fu Chengyu said.

Shell also is making inroads into downstream business segments. It opened a lubricant technical center in Shanghai on Tuesday, the biggest such hub in the Asia Pacific and an integral part of its global research and development network.

China's annual gas consumption will increase by 20 billion cu m every year to 230 billion cu m in 2015 the National Energy Administration said.

One of Shell's strategic priorities is to team up with Chinese energy giants in overseas markets and bring oil back to the country, Vigeveno said.

For instance, the company has collaborated with CNPC on exploration of unconventional resources in Canada and Australia, is seeking opportunities in Gabon with a second State-backed oil producer, China National Offshore Oil Co.

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