China's SDIC to Invest in Shale Gas Sector

The State Development and Investment Corp. (SDIC), China's largest state-owned investment holding company, will invest 30 billion yuan (4.75 billion U.S. dollars) into shale gas exploration and development in the southwest China city of Chongqing, Xihnua reported.

The company and Chongqing municipal government signed an agreement which says that the two parties will form a joint venture for shale gas projects.

China, which holds huge reserves of shale gas, is trying to exploit this unconventional form of natural gas meet its energy demands. Estimates suggest that the country may hold 31 trillion cubic meters of shale gas.

Authorities are also encouraging private participation in development process of shale gas projects.  China aims to produce 6.5 billion cubic meters of shale gas by 2015.

Liu Tienan, head of the National Energy Administration, said Monday that government departments are working to introduce beneficial policies such as tax and fiscal incentives to encourage shale gas development, Xihnua reported.