China opens shale to private investors

The country’s second shale gas auction in July will see the private sector allowed to bid for the first time, although foreign firms will be excluded. It is estimated that China may have even greater shale reserves than the US.

China is expected to hold a second auction of shale gas assets in July, with private investors being invited to bid for the first time, according to a Reuters report.

The report says that more than 70 companies have expressed an interest in taking part in the tender process, one-third of which are private enterprises. Only state-owned companies participated in the initial auction in June 2010. However, foreign firms are understood to have been excluded from the process.

China’s annual output of shale gas is expected to reach 6.5 billion cubic metres by 2015 from a standing start, as the country seeks to exploit natural gas to reduce its dependency on coal, which currently generates 70 percent of the nation’s electricity.

The US Energy Information Administration estimated last year that China has more than 25 trillion cubic metres of technically recoverable shale gas reserves, making it the largest home of such reserves in the world.