By WAYNE MA
BEIJING -- Royal Dutch Shell hopes to boost investment not
only upstream but also in the downstream gas sector in China,
as it wants to profit from every link in the gas supply chain,
the head of the company's China unit said Monday.
I don't want to just be the largest international oil
company involved in LNG supply to China, Lim Haw Kuang,
Shell's executive chairman in China, told Dow Jones
I'd like to see investment throughout the whole value
chain - from upstream to downstream - as far as gas is
Shell is already heavily involved in upstream gas projects in
China, including exploration for shale gas with PetroChina in
the Sichuan Basin and providing China with LNG from projects in Qatar and Australia.
However, the Anglo-Dutch company also has been quietly
making inroads into China's downstream gas sector.
Shell will buy a stake in an LNG import terminal at
Zhoushan, in eastern China's Zhejiang province, a person
familiar with the matter said earlier this year.
Mr. Lim said Shell wants to be involved in everything from
natural-gas processing and marketing to building a receiving
terminal for LNG cargoes.
LNG for transportation fuel is a potentially huge
market, he added. It's another area where Shell can
Meanwhile, Shell and partners Qatar Petroleum International
and PetroChina's parent company China National Petroleum Corp.,
are moving ahead with a planned refinery and petrochemical complex in the eastern
city of Taizhou, Mr. Lim said.
The project passed an administrative
hurdle in May that will allow it to continue with its
feasibility study, he said. The project is now eligible to
apply for further government reviews and approvals.
CNPC will own 51% of the Taizhou project, while Qatar and
Shell will each take a 24.5% stake, he said.
Once it is completed, Shell and Qatar will provide feedstock to the integrated refinery, petrochemical and marketing project, he added.
Imported condensate and raw materials will be used to
produce ethylene and other petrochemical products, CNPC said
after an initial framework agreement was reached in October
Private Chinese companies may ask to work with Shell and
other foreign oil companies in the second round of bidding
later this year to exploit China's shale gas reserves.
Only Chinese state-owned companies were allocated shale-gas
blocks in the first round in June 2011.
I won't be surprised if these [private] companies are
encouraged to work with foreign companies to fast track or
accelerate potential learning [of shale gas development],
Mr. Lim said.
Although analysts have been skeptical of China's ability to
achieve a target of producing between 60 billion and 100
billion cubic meters of shale gas by 2020, up from virtually
zero now, Mr. Lim said that there wasn't any reason why China
couldn't achieve its goal.
It's challenging, but I think there's no reason why
[China] can't do it once they have the right policy framework and acquire the
relevant skills quickly - with suitable policy support and incentives,
Dow Jones Newswires