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Chinese Energy Giant Joins US Company for Shale Gas Project

Beijing: A Chinese energy giant will join an American energy company to develop a shale gas project in the state of Pennsylvania.

The Chinese company, China Shenhua Energy Company Limited, announced on Tuesday that it will invest 90 million U.S. dollars to set up a subsidiary company and work with Energy Corporation of America for the project, which involves 25 shale gas wells. The investment by Shenhua and its subsidiary for the project accounts for 80 percent of the overall investment.

"The shale gas and coal are different types of energies. The transformation of Shenhua is to develop a special capability by entering the American market. It reminds China's domestic coal producers that the energy structures that focusing on coal cannot satisfy the needs of China's modernization. And structural adjustment must be made. If we want to keep China on the road of modernization, we must carry out energy structural adjustment," said Han Xiaoping, deputy secretary-general of Finance Committee, China Enterprises Investment Association.

However, the exploitation of shale gas in the United States also has its uncertainties concerning the quantities of the resources and ecological risks. Many Chinese companies go to the United States to learn production techniques in the hope to develop the market in China. But according to Gao Shixian, assistant director of the Energy Research Institute National Development and Reform Commission, risks exist.

"To apply the technologies learned from the United States to China, we have to consider the situation that there are some differences of geological conditions and the shale gas geological conditions between China and the United States. We have to adjust to make exploitation suitable for our national condition. If the cost is too high, then companies will not have profit," said Gao.


Source: Reuters



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