Royal Dutch Shell (NYSE:RDS.A) announced plans to spend at least $1 billion a year exploiting China's supply of shale gas, Reuters reported Tuesday.
The news came from the energy firm's head executive in China, Lim Haw Kuang, who responded to Reuters' questions about the alleged $1 billion-a-year plan to invest in the potentially vast natural gas trove.
In March, Shell secured its first product sharing contract for Chinese shale gas, in the hopes that getting into the market early would help the firm stake a large claim in a possible boom in shale similar to the one that transformed the U.S. energy market.
"If there has been an adjustment to that pledge, it could only be an upward revision," Lim added in the interview.
While the exact amount of China's shale gas supply remains unknown, estimates place China as the country with the largest reserves for the energy source. The natural gas can be accessed through shale rocks by hydraulic fracturing, or as it's commonly known, "fracking."
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The new technology was pioneered in North America in recent years, with many industry analysts hoping it will resolve any concerns over and oil shortage or dependency on other types of fossil fuels.
Shell is also hoping to build a $12.6 billion refinery and petrochemical complex in eastern China. If seen through as planned, the project could be the single largest foreign investment in China to date.
Other large energy firms such as Exxon Mobil (NYSE:XOM), BP (NYSE: BP), Total (NYSE: TOT) and Chevron Corp (NYSE: CVX) are hoping to expand their presence further into the Chinese market. Reuters reports that natural gas use in the country is expected to triple in the coming decade and comprise more than a third of the world's total energy usage.
To facilitate the new endeavor, Shell formed a partnership with China National Petroleum Corp. -- the country's top energy group and parent of PetroChina (NYSE: PTR), for both the shale gas operations and its Taizhou refinery project.