US links up with Chinese firm in shale gas projectUpdated,Yunnan Adventure Travel

US links up with Chinese firm in shale gas projectUpdated

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

The Chinese energy giant announced that it will join with an energy firm called Energy Corp ofAmerica 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 setup a subsidiary for the new project.

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

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

However, Shenhua has never been involved in foreign shale gas projects before, and neitherhave other coal firms in China.

US links up with Chinese firm in shale gas project

Spurred by the application of new technology, includinghydraulic fracturing and horizontal drilling, US unconventionalgas production has been on a continuous rise starting from2007.

David Sandalow, assistant secretary for policy andinternational affairs at the US Energy Department, said earlierthis year that the US spent 20 years before the shale gasindustry achieved commercialized production driven byinvestment from the government.

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

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

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