By Rebecca Kanthor
CORRESPONDENT
Published: October 29, 2014 1:28 pm ET
Updated: October 29, 2014 1:30 pm ET

Image By: Rebecca Kanthor
Qi Min, director of ICIS China.

SHANGHAI — Shale gas and its impact on China was the hot topic at the FlexPO conference, held Oct. 22-24 in Shanghai.

While the possible reserves of shale gas in China are promising, China’s shale gas industry has been slow to develop because of technology, said Qi Min, director of ICIS China. Another limitation is the risk of water pollution in an already water-hungry nation, she said.

Imported shale gas volume is rising, but faster than domestically produced shale gas. Even as shale gas production increases in China, she said, only a very small percentage will be used in chemical production.

“Even if in five years there is more shale production in China, most of it will be used to make electricity,” she said. “The Chinese government doesn’t encourage the use of domestic shale gas in chemical production and is raising prices.”

The future of shale gas in the chemical industry will be specified in the 13th five-year plan in 2015, she added.

In contrast, shale gas development in the United States is happening very fast, she said. Some 200 U.S. projects are being planned in the next few years, with 2017 set to be a peak for shale-related chemical projects.

China is getting into the act, she said, as companies realize that cheap American shale gas will bring opportunities to companies to export to China. There is a trend of Chinese companies investing in shale-to-olefin projects in the United States.

“From now until 2018, there will be almost 7 million tons of [new polyethylene from U.S. plants], almost all will be using shale gas. I estimate about 40 percent will be exporting to China,” she said.