Booming natural gas resources in the United States have attracted significant investment from major foreign energy players in Asia and Europe.
China’s China Petroleum & Chemical Corp (Sinopec) and France’s energy giant Total SA recently announced new investments totaling $4.5 billion to take advantage of as of yet undeveloped shale rock formations in Alabama, Mississippi, Colorado, Ohio and the Michigan Basin.
In its first entrance into the U.S. natural gas industry, Sinopec will partner with Devon Energy Corporation in a $2.2 billion joint venture to develop five fields.
Total cemented a $2.3 billion agreement with Chesapeake Energy Corporation to develop the Utica gas field in Ohio, which studies indicate is rich in liquids such as butane, propane and ethane as well as natural gas.
At under $3 per million BTUs, U.S. natural gas prices are at their lowest in over two years. As a result, shale formations with high concentration of liquids, such as the Utica field, are attractive to investors because prices of extracted liquids are linked with crude oil, rather than natural gas.
Additional interest in U.S. natural gas has been seen from Norway’s Statoil ASA and India’s Reliance Industries Ltd., indicating that global energy conglomerates are seeking to add “unconventional” fossil fuel resources to their portfolios and are willing to spend big money to do so.
The explosive growth in North American natural gas resources is one of today’s key energy trends. For more information, click here to read more of our posts on natural gas.