China To Award Shale Rights

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PetroChina, China's largest oil company, and Sinopec, Asia's largest refiner, are among the companies that could be awarded contracts to develop China's vast shale-gas reserves as the world's fastest-growing major economy looks to develop cleaner-burning fuel sources to reduce a massive pollution problem.

China is expected to auction rights to develop shale-gas deposits in the Nanchuan and Xiushan blocks in southwest China. The country's shale-gas deposits are believed to be 50% larger than those found in the U.S., the world's largest natural gas producer. Foreign companies will likely continue to be barred from the second auction planned for later this year, Bloomberg News reported.

China, aiming to triple the use of gas to about 10% of energy consumption by 2020, may hold 1,275 trillion cubic feet of shale gas, Bloomberg reported, citing the U.S. Energy Information Administration. Shale estimates for the U.S. rest at over 860 trillion cubic feet.

PetroChina (PTR) and Sinopec (SNP) were among several companies that submitted nine bids for shale-gas rights in China.