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Challenges call for different solution
By Richard Fu |
November 26, 2010, Friday
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Print Edition
Print Edition
CHINA will take a different route in developing unconventional gas compared with the United States due to a unique set of challenges it faces, Wood Mackenzie, a research and consulting firm for global mining, metal and energy, said yesterday.
China faces geological, technical and commercial challenges in extracting unconventional sources like shale gas and coal-bed methane, which means that it still has to import additional piped and liquefied natural gas to meet aggressive demand growth by 2020.
"As China's gas demand growth has accelerated in recent years and unconventional gas has been proposed as a solution to supply issues, analogies have been quickly drawn to the US where rapid production growth was achieved after the initial commercial development," Gavin Thompson, director of China gas research at Wood Mackenzie, said. "However, a unique range of challenges faced by China means that they will not replicate the US experience in a linear fashion."
Still, the Edinburgh-based consulting firm sees unconventional gas as a long-term solution to China's demand needs. In July it estimated unconventional gas may account for more than a quarter of China's supplies by 2030.
Steve Kirchhoff, Exxon Mobil Corp's Americas vice president for natural gas, told a Houston conference last week that unconventional sources could account up to 70 percent of US gas supplies in 2030, Dow Jones reported.
Thompson said China should accelerate investment to address geological conditions and companies need to transfer and develop technologies for local conditions.
"As China still needs to meet demand, we expect an additional 5 billion cubic feet per day from Central Asia and Russia will be signed in the next 3-4 years to ensure supply by 2017-2018," he said.
China faces geological, technical and commercial challenges in extracting unconventional sources like shale gas and coal-bed methane, which means that it still has to import additional piped and liquefied natural gas to meet aggressive demand growth by 2020.
"As China's gas demand growth has accelerated in recent years and unconventional gas has been proposed as a solution to supply issues, analogies have been quickly drawn to the US where rapid production growth was achieved after the initial commercial development," Gavin Thompson, director of China gas research at Wood Mackenzie, said. "However, a unique range of challenges faced by China means that they will not replicate the US experience in a linear fashion."
Still, the Edinburgh-based consulting firm sees unconventional gas as a long-term solution to China's demand needs. In July it estimated unconventional gas may account for more than a quarter of China's supplies by 2030.
Steve Kirchhoff, Exxon Mobil Corp's Americas vice president for natural gas, told a Houston conference last week that unconventional sources could account up to 70 percent of US gas supplies in 2030, Dow Jones reported.
Thompson said China should accelerate investment to address geological conditions and companies need to transfer and develop technologies for local conditions.
"As China still needs to meet demand, we expect an additional 5 billion cubic feet per day from Central Asia and Russia will be signed in the next 3-4 years to ensure supply by 2017-2018," he said.
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