Chinese Shenhua Strikes Sign JV with ECA in Marcellus

A subsidiary of China’s largest coal company has signed an agreement with Denver based Energy Corporation of America (ECA) to enter into a 50/50 JV to develop 25 natural gas wells in southwestern Pennsylvania’s Marcellus Shale over the next year and half.

According to the agreement, Shenhua America Holdings Corporation, a subsidiary of China’s Shenhua Energy, will contribute the first USD 90 million for ECA, the JV’s operator, to drill the wells, while future expenses will be evenly split.

The 25 wells will be drilling southwestern Pennsylvania’s Green County, and the venture is targeting mostly dry gas, which will likely be sold domestically.

Mr Kyle Mork COO of ECA said that it’s not about exports for China’s Shenhua. They’re looking at this as an investment in the US more than moving gas back to China.

The JV is expected to produce 3.8 billion cubic meters of gas over the next 3 decades.

Mr John Mork CEO of ECA in a statement said that "It is only fitting for these operations to take place in Greene County... we are experts in shale gas development. We are very pleased to be working with Shenhua on this joint venture, and this is only the beginning of what, I hope, will be a long, mutually beneficial working relationship."

(steelguru.com, edited by Topco)