Shell eyes US$1b to exploit China's shale gas

Royal Dutch Shell plans to spend at least US$1 billion a year exploiting China's potentially vast resources of shale gas, the firm's top China executive has said, part of an aggressive strategy to expand in the world's biggest energy market.

Shell in March secured China's first product sharing contract for shale gas, hoping that getting in early will allow it to be a big beneficiary from the sort of boom in shale that has transformed the US energy market.

Asked if the firm remained committed to a plan to invest US$1 billion a year in China's shale gas over the coming few years, Lim Haw Kuang, Shell's top China executive, said in an interview: "Yes, yes and yes."

"If there has been an adjustment to that pledge, it could only be an upward revision," added Lim, a Malaysian and a Shell veteran of 34 years.

China is estimated to hold the world's largest reserves of the unconventional gas - which can be unlocked from ancient shale rocks by "hydraulic fracturing," a technology well developed in North America.

Shell also eyes building a US$12.6 billion refinery and petrochemical complex that may be the single largest foreign investment in China.