US links up with Chinese firm in shale gas project

A man visits Shenhua Group's booth at the China Beijing International High-tech Expo in this file photo taken in 2011. [Photo/Asianewsphoto]

The booming US shale gas industry is to embrace a new partner - China's Shenhua Energy Co Ltd, the biggest coal producer in the world.

The Chinese energy giant announced that it will join with an energy firm called Energy Corp of America to develop a shale gas project located in the state of Pennsylvania.

According to a statement released by Shenhua, the company plans to invest $90 million to set up a subsidiary for the new project.

The project, which includes 25 shale gas wells, is expected to produce 3.8 billion cubic meters of gas in its first 30 years of operation.

Shenhua had already secured a gas project in Central China's Hunan province at the beginning of this year. It plans to expand its shale gas business in Southwest China's Guizhou province, the statement said.

However, Shenhua has never been involved in foreign shale gas projects before, and neither have other coal firms in China.

Spurred by the application of new technology, including hydraulic fracturing and horizontal drilling, US unconventional gas production has been on a continuous rise starting from 2007.

David Sandalow, assistant secretary for policy and international affairs at the US Energy Department, said earlier this year that the US spent 20 years before the shale gas industry achieved commercialized production driven by investment from the government.

Like other industries, innovation is the key to solving environmental problems during shale gas exploration, he said.

Earlier this month, the National Energy Administration said China has made much progress in shale gas development in Chongqing city, which is expected to reach a capacity of 5 billion cubic meters of the energy source by 2015.

Related readings:

China can learn from US in shale gas exploration
Shale gas deal just the start for China: Officials
Shale gas sector gears up in China
China's shale gas output reaches 143m cubic meters
Mass production of shale gas in the pipeline