100 Chinese companies line up for shale gas auction

BEIJING: Individual real estate developers and even a grain trader are among the 100 Chinese bidders who have joined the scramble for a piece of the second shale gas exploration tender issued by the government . Most of them have little direct knowledge of the shale gas business.

The government had earlier declared that potential bidders had to be local entities with a registered capital of 300 million yuan ($47 million) and with licences to explore oil and gas or other gaseous mineral resources . So, the foreign entities wishing to get a taste of the gas business in China will have to join hands with the Chinese bidders . China is believed to hold world’s largest deposit of shale gas, making it an attractive proposition for foreign players.

Small companies including coal firms and real estate developers have some special advantages in terms of connections with the local government and knowledge of the ground situation in different provinces with shale gas deposits, sources said.

“The door has been opened a lot wider this time,” a ministry source explained. Even a tobacco company has joined the bidding . About 20 blocks, spanning half a dozen provinces in the south but with a total area of little over 10,000 square km, will be auctioned, the sources said.