China to stick with Middle East oil despite world’s largest shale reserves

December 30, 2013

Shale gas will not free China from Middle East oil imports, an investment vehicle of the Kuwaiti government said.

The world’s top fuel consumer is home to what is believed to be the world’s richest reserves of shale gas – 19 per cent of the global total, compared to the United States’ 13 per cent. But China’s efforts to play on its geological advantage to lessen its dependence on fuel imports will be hampered by limited expertise and water supply, one of the key ingredients of the mixture of sand and chemicals pumped into the ground to fracture shale formations.

“Shale gas will not play a substantial role in the Chinese energy mix,” wrote Francisco Quintana, a senior economist at Asiya Investments, a marketing and advisory firm owned by Kuwait China Investment Company. “Technical issues like lack of water, depth of the gas deposits, proximity to urban areas and lack of technological skills make exploitation extremely expensive.”

Kuwait China Investment is part-owned by the Kuwait Investment Authority, the sovereign wealth fund, as well as National Investments Company and Alghanim Industries.

Copyright, The National.ae, 2013