CHINA: SHALE GAS PLAYS
China introduced its 'Shale Gas Development Plan (2011-2015)' with targets to produce 6.5 bcf of shale gas production by 2015 and expand production to 60-100 bcm by 2020 – a minimum of 56% growth in production year-on-year. This would require drilling some 20,000 wells and significant investment in both drilling and associated infrastructure.
However, China faces unique challenges compared with the U.S. China's shale gas is in mountainous terrain and located 1,500m-4,000m below the ground (U.S. is typically 800-2600 m) making for more difficult and expensive access. In addition, the hydraulic fracturing and horizontal drilling techniques used in the U.S. may not be a perfect or fitting solution for China. Another challenge is the lack of established infrastructure. Accordingly, it is estimated that drilling gas wells may cost 10 times more than in the U.S.
In addition, in the past two years, it is apparent that China's NOCs have been struggling with the low returns on their investments, causing a big hurdle and a lack of appetite for further investment. But despite the challenges, China has not backed down and its 2015 targets are still a possibility.
On the technological front, it is apparent that Chinese companies have been actively seeking to acquire intellectual property and know-how in the shale-gas industry. Organizations such as CNOOC, Sinopec and Petrochina have recently acquired or invested in North American companies such as Nexen and Devon Energy, suggesting a strategic intent to not only secure a larger E&P foothold globally but to gain intrinsically from a transfer of knowledge.
Sinopec has surprised some industry analysts with recently revised production targets of 1.8 bcm by the end of 2014, 5 bcm by 2015 and 10 bcm by 2017. This represents a 10-fold increase in the target planned for the Fuling Field shale play near Chongqing in Sichuaun province. Sinopec has also developed a series of in-house technologies such as the 'Model 3000 fracturing vehicle' of which four of these have already been deployed on-site, as well as fast drilling technologies. Sinopec has also completed commercial mass production of many of these tools and indeed has exported to North America, sometimes at prices 50% below US-manufactured equipment. Perhaps we will see a potential revolution in China's shale gas industry.
|February, 16, 23:45:00|
|February, 16, 23:40:00|
|February, 16, 23:35:00|
|February, 16, 23:30:00|
|February, 16, 23:25:00|
|February, 16, 23:20:00|
AOG - The Dubai Electricity & Water Authority (DEWA) is to invest around $22bn on new energy projects across the next five years, with the renewables sector accounting for an increasing share of electricity generation, according to CEO Saeed Mohammed Al Tayer.
TRANSCANADA - TransCanada Corporation (TSX:TRP) (NYSE:TRP) (TransCanada or the Company) announced net income attributable to common shares for fourth quarter 2017 of $861 million or $0.98 per share compared to a net loss of $358 million or $0.43 per share for the same period in 2016. For the year ended December 31, 2017, net income attributable to common shares was $3.0 billion or $3.44 per share compared to net income of $124 million or $0.16 per share in 2016.
ROSATOM - February 13, 2018, Moscow. – ROSATOM and the Ministry of Scientific Research and Technological Innovations of the Republic of Congo today signed a Memorandum of Understanding on cooperation in the field of peaceful uses of atomic energy.
FRB - Industrial production edged down 0.1 percent in January following four consecutive monthly increases. Manufacturing production was unchanged in January. Mining output fell 1.0 percent, with all of its major component industries recording declines, while the index for utilities moved up 0.6 percent. At 107.2 percent of its 2012 average, total industrial production was 3.7 percent higher in January than it was a year earlier. Capacity utilization for the industrial sector fell 0.2 percentage point in January to 77.5 percent, a rate that is 2.3 percentage points below its long-run (1972–2017) average.