Whilst China has the largest reserves of Shale gas in the world, it seems as though Australia will be the next country to start producing significant amounts of shale gas, after the US has already experienced a huge boom in output thanks to its early adoption of fracking processes.
By developing domestic shale resources, China will be able to reduce its dependency on expensive imports from Russia and central Asia, or in the form of LNG via sea. Australia would benefit by creating the supply to feed its growing LNG industry, giving it the opportunity to become the undisputed world leader in LNG production and export.
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An article at Reuters explained the state of the global shale gas industry in the following metaphor:
“If shale gas were a marathon, the United States is already at the half-way mark, running at a comfortable pace. Australia is a few hundred metres into the race and China has barely crossed the starting line.
The good news is that other potential runners are nowhere in the picture. Argentina and Mexico, which have the second- and sixth-highest potential reserves, are still in the changing rooms, as is eighth-ranked South Africa.
Other countries, such as Britain, have yet to decide if they can run the race, while France has declined to enter and Poland looks like it has pulled up lame.”
Australia is described as ahead of China, despite its far smaller reserves, estimated at 437 trillion cubic feet compared to China’s 1,115 trillion cubic feet, according to the EIA, due to a couple of main factors.
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Number one is that Australia’s shale reserves are located in remote regions, far from developed urban hubs, and therefore far less likely to meet resistance. And even though the shale fields are remote, energy infrastructure already exists in the area, and to deliver product to more centralised hubs, due to the history of conventional oil and gas production from the fields.
Then there is the fact that Australia’s shale industry has already attracted investment from Chevron, ConocoPhillips, Total, Mitsubishi Corp., and Bharat Petroleum. On the other hand, China has been much more reluctant to invite the help of foreign companies.
By. James Burgess of Oilprice.com