It is a good time for Chinese companies to buy into US natural gas projects given the low international natural gas prices, experts said yesterday, after media reported that the head of China’s largest energy company paid a visit to the US to talk about a possible gas shale assets acquisition.

Fu Chengyu, chairman of Sinopec Corp, was in Oklahoma last week to explore the possibility of a bid for a shale gas project, which is owned by Chesapeake Energy, the second largest shale gas producer in the US, Reuters reported.

“Natural gas prices are currently at a low level in the US, mainly affected by overproduction and sluggish demand in the country,” said Lin Boqiang, director of the Center for Energy Economics Research at Xiamen University, adding that international energy prices may remain at a low level under the current global economic gloom.

The US-based gas producer is facing financial difficulties due to its fast expansion, a fact which will help Sinopec to get a good bargain in the potential assets deal, according to Lin.

Chesapeake Energy said earlier this month that it would sell up to $11.5 billion in assets this year to fill a funding gap.

However, the Reuters report did not specify what assets Sinopec might bid for, or how much the bid would be. But 21st Century Business Herald reported Friday that Sinopec is interested in a 337,000-acre (136,379 hectares) project in Ohio, citing a company source.

Sinopec was not immediately available for comment yesterday, while Chesapeake Energy declined to talk about the issue when reached by the Global Times.

Chinese energy companies have stepped up efforts to buy overseas assets to meet the country’s growing appetite for energy, but Lin said that Sinopec is mainly seeking shale gas technology from the potential deal.

Wang Ruiqi, a natural gas industry analyst with C1 Energy, believes “China’s shale gas development is still at a nascent stage, and now is a crucial time for the country to gain related technologies.”

China currently has a shale gas reserve of some 134 trillion cubic meters, of which 25 trillion cubic meters are recoverable, data from the Ministry of Land and Resources showed in March. Annual production of shale gas is expected to top 650 million cubic meters by 2015.

“The domestic shale gas sector is expected to take several years to realize large-scale commercial production,” said Wang.

Experts said that China’s need for shale gas technology will lead to more cooperation with the US.

China has seen a number of cases of overseas moves in the shale gas sector. For example, in January, Sinopec completed a deal to buy a 33 percent stake in US energy firm Devon Energy Co’s five shale gas projects. And in February, another domestic energy giant, PetroChina, bought a 20 percent stake in a shale gas project of energy company Shell in Canada.

By Liang Fei