Join The Discussion

 

Two from Fort Worth appointed by Gov. Abbott to university boards

Steve Hicks, a University of Texas System regent who has been a vocal opponent of regents who have criticized the system’s flagship campus in Austin, was reappointed to the board by Gov. Greg Abbott on Thursday. 

read more >

Fort Worth draws closer to deal with Lancaster developer

City staff are planning to introduce the developer Feb. 3 at a meeting of the City Council's Housing and Economic Development Committee.

read more >

Compass BBVA names Happel CEO for Fort Worth

BBVA Compass has appointed Brian Happel, most recently the Fort Worth city president, its chief executive officer of Fort Worth.

read more >

Fort Worth minority business receives nationwide grant

Cuevas Distribution Inc., a minority- and woman-owned business in Fort Worth, is one of 20 small businesses nationwide to receive a $150,000 grant from Chase as part of the Mission Main Street program.

read more >

Museum District: Area’s evolution creating more interaction, public spaces

Fifteen years ago if someone had shot a cannon from Fort Worth’s world-renowned museum district, nobody would have noticed, joked Lori Eklund, senior deputy director of the Amon Carter Museum of American Art. But that has changed.

read more >

 

China seen outspending U.S. drillers to chase shale-gas boom

Benjamin Haas
(c) 2014, Bloomberg News.


HONG KONG — China's effort to catch up with the United States in developing shale gas and become more energy independent is coming at a big cost: It's spending four times as much developing some fields, according to a new report.

Holding the world's biggest potential reserves of natural gas in shale rock, China will spend billions of dollars in trying to close a gap with the shale leader, which is about a decade ahead in developing the energy resource, according to a study by Bloomberg New Energy Finance released Thursday.

The emergence of shale projects in Asia and Europe affects global gas and oil prices and is changing the energy agendas of governments from London to Beijing. In China, leaders mandated national targets for their producers such as state-owned China Petroleum & Chemical Corp., known as Sinopec.

"For the government, shale is one of the highest priorities, and Sinopec is looking to distinguish itself by making gains in shale," Xiaolei Cao, an analyst at Bloomberg New Energy Finance, said in an interview.

Sinopec's estimate that it will spend an average of $10 million per well at its Fuling site compares with costs as low as $2.6 million a well in parts of the U.S., BNEF said.

The chasm will narrow going forward. Sinopec's drilling costs will fall as it ramps up production to meet the government's target of 6.5 billion cubic meters a year by 2015. Analysts say that goal is increasingly within reach after massive investments by China and overcoming technological hurdles.

"By reducing costs, Sinopec will be able to produce more gas and those economies of scale will further bring down its expenditure," Cao said.

In contrast to China's target of 6.5 billion cubic meters, the U.S. produced almost 300 billion in 2012, the last year data is available, according to the Energy Information Administration.

Two calls to Lv Dapeng, Sinopec's Beijing-based spokesman, were unanswered Thursday.

Sinopec has made progress reducing its costs at Fuling in the past two years, BNEF said. It could even be cheaper than a landmark $400 billion deal China signed with Russia earlier this month, depending on the amount a well produces, according to the report.

PetroChina Co. in 2012 produced 74 percent of the nation's natural gas, while Sinopec's share was about 16 percent, according to the two companies' annual reports of gas production, which was almost entirely conventional and tight gas.

In keeping with its goals to improve air quality, China plans to increase natural gas consumption to 9 percent of its total energy demand by 2017, up from 5.2 percent in 2013, and hold coal consumption to below 65 percent, according to a statement from China's National Development and Reform Commission on May 16.

Beyond its 2015 target, China aims to produce between 60 billion to 100 billion cubic meters of shale gas by 2020. While next year's goal now seems within reach, analysts say they are still wary of such a rapid development in shale.

The 2020 target "still looks quite ambitious," Charles Blanchard, head of gas research for BNEF said in a statement. "Costs must continue to fall and greater competition, at least in the upstream, will be required."

China holds the world's largest reserves at 25.08 trillion cubic meters of exploitable onshore shale gas, the country's Land and Resources Ministry said in March 2012. The U.S. has 13.65 trillion cubic meters of technically recoverable gas from shale formations, its Energy Information Administration said in January that year.

< back

Email   email
hide
Catch
How 'bout them Cowboys?