CNPC, Shell agree to create joint venture for gas drilling
Source: Bloomberg News |
June 21, 2011, Tuesday
|
Print Edition
Print Edition
ROYAL Dutch Shell Plc and China National Petroleum Corp agreed to set up a venture to drill onshore gas wells more efficiently in the world's largest energy-consuming nation.
The partners will have equal shares in a well manufacturing venture and will deploy "state-of-the-art technologies," such as automated directional drilling and optimization, some of which were "pioneered by Shell in its North America tight gas operations," the Hague-based company said yesterday. The venture is part of a global alliance between the largest European and Asian oil companies, according to the statement.
China's shale gas deposits may hold 12 times more fuel than its conventional fields, the US Department of Energy estimated in April. China needs to develop drilling technologies to repeat the transformation of gas production in the US, which in 2009 became the largest gas producer ahead of Russia because of output from shale fields.
In March, China completed its first horizontal shale gas well after 11 months of drilling, according to CNPC. Chuanqing Drilling Engineering Co, a unit of CNPC, drilled the well. Baker Hughes Inc has helped clients in the US reduce shale gas drilling time to about 16 days a well, according to its website.
"Full scale commercialization of tight gas, shale gas and coal bed methane can require the drilling of hundreds of wells each year, over many years," Shell said.
China wants to triple the use of natural gas to about 10 percent of its energy consumption by 2020 as it cuts reliance on coal.
Shell and CNPC have four main joint activities at present: the development of coal-bed methane resources in Australia, production in Syria, exploration in Qatar and unconventional gas drilling in China. They are considering investing in a heavy oil venture in Canada.
The partners will have equal shares in a well manufacturing venture and will deploy "state-of-the-art technologies," such as automated directional drilling and optimization, some of which were "pioneered by Shell in its North America tight gas operations," the Hague-based company said yesterday. The venture is part of a global alliance between the largest European and Asian oil companies, according to the statement.
China's shale gas deposits may hold 12 times more fuel than its conventional fields, the US Department of Energy estimated in April. China needs to develop drilling technologies to repeat the transformation of gas production in the US, which in 2009 became the largest gas producer ahead of Russia because of output from shale fields.
In March, China completed its first horizontal shale gas well after 11 months of drilling, according to CNPC. Chuanqing Drilling Engineering Co, a unit of CNPC, drilled the well. Baker Hughes Inc has helped clients in the US reduce shale gas drilling time to about 16 days a well, according to its website.
"Full scale commercialization of tight gas, shale gas and coal bed methane can require the drilling of hundreds of wells each year, over many years," Shell said.
China wants to triple the use of natural gas to about 10 percent of its energy consumption by 2020 as it cuts reliance on coal.
Shell and CNPC have four main joint activities at present: the development of coal-bed methane resources in Australia, production in Syria, exploration in Qatar and unconventional gas drilling in China. They are considering investing in a heavy oil venture in Canada.
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