China shale development lags behind targets

China continues to lag behind targets for the development of shale gas, a delay which is likely to benefit overseas suppliers including Exxon Mobile Corp (XOM.NYSE, XOMA.FRA) and Royal Dutch Shell Plc (RDS.NYSE, RSDA.LON), Reuters reported. Shale gas output is on track to rise to 23 billion cubic meters in 2020, or only 29% of the government’s 80 billion target, according to seven analysts surveyed by Bloomberg. China’s efforts to develop shale gas, which now satisfies much of the US demand for energy, have been complicated by tougher geology and a lack of expertise in extraction. Chinese drillers have formed partnerships with foreign companies – for example, Shell’s joint drilling with China National Petroleum Corporation – but have yet to produce shale gas commercially. China imported US$5.8 billion in liquefied natural gas imports in 2011 and will need to continue boosting purchases of LNG from providers such as Exxon, Chevron Corp (CVX.NYSE) and Woodside Petroleum (WPL.ASX) to meet demand, analysts said.