U.S. Shale Advances Destined to Fuel China's Future, Report Says

The U.S. shale gas boom and the technology that helped drive it are establishing the foundation for building a similar shale transformation in China, the world's fastest growing energy consumer, according to a new global natural gas market assessment by Boulder, CO-based Navigant Research. Although still wrapped in uncertainty, China is destined to be the major market for natural gas in the Asia-Pacific region.

China's government has set extremely ambitious goals for shale gas production through 2020, according to Brandon Bass, a senior consultant with Navigant, writing in a natural gas market assessment released on Monday. "In the near term, increasing demand in the Asia-Pacific region will likely overshadow most increases in Chinese shale gas production, while domestic production from conventional and offshore resources could reduce the need for imported gas," Bass said.

In the short and medium term, liquefied natural gas (LNG) exports to China are likely from both the United States and Canada, said Bass, while adding that in the medium and longer term, China can be expected to successfully develop its shale gas potential as well as increase its LNG production and import capacity.

China's energy consumption doubled between 1984 and 2000, and re-doubled between 2000 and 2008. It has become a net importer of oil (1993), natural gas (2007) and coal (2009) as a result. Natural gas made up only 5% of the energy consumption in 2012, compared with other industrialized nations, such as the United States, UK and Japan where gas is 24%, 33% and 24% of the energy mix, respectively.

Meanwhile, in the United States, Navigant is forecasting the unconventional gas production will exceed production from conventional sources by 2020, and the U.S. will be a next exporter of gas by 2018.

( naturalgasintel.com Edited by Topco)