"The key is to get in big, get in early," Ahlbrandt said, regarding unconventionals. "It is a matter of finding the sweet spots. All shales are different. It sounds easy, but it isn't." However, Ahlbrandt noted once an operator is in a fairway it's more "manufacturing" than traditional production. That is the reason, "unconventionals are changing everything."

Falcon is largely focused on three basin-centered hydrocarbon deposits. Ahlbrandt noted one is in what is probably the planet's oldest petroleum basin, namely Australia's Beetaloo Basin. Another is in the very young Pannonian Basin in Hungary. The third is the South African Karoo Basin, which in terms of geologic time lies somewhere in between. The company is looking for partners in all three of these unconventional plays.

http://www.bloomberg.com/news/2010-07-26/china-s-lng-demand-forecast-for-2020-raised-by-48-wood-mackenzie-says.html

China’s demand for liquefied natural gas may increase 48 percent in 2020 from an earlier forecast as the cleaner-burning fuel displaces oil, Wood Mackenzie Consultants Ltd. said.

LNG consumption in 2020 may reach 46 million metric tons a year from a previous estimate of 31 million from end-2009, the Edinburgh-based energy consultants said in a report titled “Race for Supply - The Future of China’s Gas Market.”

“This strong demand growth will not purely be driven by gross domestic product,” Gavin Thompson, China gas study director for Wood Mackenzie, said in an e-mailed statement today. “The gas demand story is about displacing oil products, not coal, in the industrial and residential sectors.”

China’s economy expanded 10.3 percent in the second quarter from a year earlier, down from 11.9 percent the previous three months, after the government tempered credit expansion, investment spending and property speculation. The full-year expansion will be 10 percent, according to the median forecast in a Bloomberg News survey of 20 economists on July 15.

The nation’s gas demand may rise to 43 billion cubic feet a day (444 billion cubic meters) in 2030 from 9 billion cubic feet a day last year, with strongest growth prior to 2020, according to excerpts from the Wood Mackenzie report.

“This will expand the opportunity for LNG suppliers seeking to secure markets, particularly those in Australasia,” Thompson said.

Additional LNG

The world’s biggest energy user may boost LNG purchases by about 65 percent this year from imports of 5.5 million tons in 2009, according to Facts Global Energy in a July 22 report. Imports in June rose by 58 percent from a year earlier to 741,732 tons, according to customs data from China. Purchases of the fuel reached a record 842,697 tons in April.

Production of unconventional gas, lodged in rocks and coalfields, may exceed 11 billion cubic feet a day in China by 2030, accounting for more than a quarter of total gas supply, Thompson said.

Gas deposits found in unconventional and hard-to-extract sources may account for as much as 75 percent of China’s total reserves of 3,687 trillion cubic feet based on 2020 demand, adequate to supply the world’s second-largest energy user for a century, Sanford C. Bernstein & Co. said in November. The country currently has 80 trillion cubic feet of proven conventional gas reserves, representing 10 years of total supply, it said.

Shale Expands

“Shale gas is the major growth story in China gas,” Wood Mackenzie’s Thomson said. “However, unconventional gas resources will take a significant time to develop and therefore meeting its gas demand will require China to import significant additional volumes of LNG and piped gas, particularly up to 2020.”

Chevron Corp., BG Group Plc, Santos Ltd., Woodside Petroleum Ltd. and Inpex Corp. are among companies developing LNG projects in Australia, both from conventional offshore fields and from coal-seam gas. Chevron said on its website that the proposed Wheatstone venture in Western Australia may produce 25 million tons of LNG a year, almost sufficient to supply South Korea, the world’s biggest LNG user after Japan.

Roger Martin, a spokesman for Woodside Petroleum Ltd., which is planning the Pluto LNG project in Western Australia, declined in an e-mail to comment. Representatives of Chevron, Santos, and BG didn’t immediately respond to calls or e-mails.

To contact the reporter on this story: Dinakar Sethuraman in Singapore at dinakar@bloomberg.net