BEIJING, March 27 (UPI) -- Royal Dutch Shell sees natural gas as the right ingredient for China's long-term economic growth potential, Shell Chief Executive Officer Peter Voser said.
Shell said it plans to spend $1 billion on the development of shale natural gas reserves in China after receiving government backing for a production sharing contract with China National Petroleum Corp.
Voser told Bloomberg News that Chinese use of natural gas was a necessary ingredient for economic growth.
"This is the right energy source for the longer term for China given its advantage from the perspectives of carbon dioxide versus coal and oil," he said.
China has a growth plan of relying on natural gas to meet the annual energy demands of 18 percent of the population by 2015.
Shell targets a 1,350-square-mile area for shale natural gas in the Fushun-Yongchuan block in southwestern China. The company didn't provide an exploration agenda.
The U.S. Energy Department's Energy Information Administration reports China may hold nearly twice as much as the estimated 862 trillion cubic feet of shale natural gas in the United States.