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Video: Strong interest in China shale-gas sector

11-01-2012 10:40 BJT

Last week, CCTV reported China’s Ministry of Land and Resources received strong interests in an auction of the country’s shale-gas blocks. Although the official results of the auction have yet to be published, the auction has already ignited a storm of interest for shale-gas companies in China's capital markets.

A bullish corner in a bearish market.

Pei Yunpeng, chemical industry researcher of Shanxi Securities, said, "The whole sector have risen nearly 9 percent recently."

These stellar returns are happening in China’s shale gas sector. The share price of Shandong Molong Petroleum Machinery, which mainly designs and produces machinery for the oil sector, has seen its shares surge 200 percent since the start of the year. Another company which sells shale gas products has seen its share price jump 88 percent year to date.

Pei said, "In the field of shale gas, we believe investors could put their money to work through either speculation or strategic investment. For the short run, we think there are opportunities in natural gas exploration and mining."

So what’s behind this enthusiasm for shale gas? For starters, China has huge demand for energy. Shale gas is also cost competitive once fully developed. Hence analysts say shale gas companies are worth holding for the long term.



Editor:James |Source:

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