Shell Plans To Invest $1 Billion Annually Into China
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Royal Dutch Shell Plc, the world’s second largest company by 2011 revenue, is set to invest around $1 billion annually in its upstream businesses in China starting from this year, said its CEO Peter Voser to the China Daily on Tuesday, citing the company’s desire to capitalise on the increasing demand for natural gas across the nation.
Royal Dutch Shell Plc, the world’s second largest company by 2011 revenue, is set to invest around $1 billion annually in its upstream businesses in China starting from this year, said its CEO Peter Voser to the China Daily on Tuesday, citing the company’s desire to capitalise on the increasing demand for natural gas across the nation.
“There is huge potential to come in terms of the natural gas market in China,” Voser said, noting that his company’s integrated-gas earnings globally have more than tripled in the past five years, reaching $9 billion in 2011.
Last week, Shell also announced that it would be investing more than $20 billion worldwide in natural gas projects through 2015 as profits from extracting, processing and selling the fuel increase.
Shell presently has two gas blocks, Jinqiu and Fushun-Yongchuan, in China’s Sichuan province, an area known to be rich in gas reserves; while the company has already drilled, in co-operation with the state-owned China National Petroleum Corp, 13 out of 21 planned wells in Jinqiu, which has a daily output of 110,000 cubic meters.
In late October, Liu Tienan, the head of National Energy Administration, estimated that annual natural gas consumption in China will rise to 230 billion cubic meters by 2015, while supply will likely be above 260 billion cubic meters.
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China’s natural gas imports for 2012 are also due to reach 42.59 billion cubic meters, a growth rate of 35.69 percent year-on-year, according to statistics from energy information consultancy ICIS C1 Energy.
Voser said that his company intends to focus more on providing natural gas for China’s transportation market. Transportation is due to account for around 25 percent of China’s LNG consumption in 2012, said C1 Energy.
[quote]”Just as China made an impact on the global oil market in the last decade, China is expected to make an impact on the global gas market over the next ten years as a steadily growing gas consumer,” told Economist Intelligence Unit industry analyst, Peter Kiernan to edieEnergy, last year.[/quote]“China is a key focus area for development of unconventional gas, outside the US, for the world’s major oil and gas companies…and development of shale gas is a high priority for the Chinese government as China’s gas demand is expected to rapidly increase over the next decade and beyond,” he added.
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