Britain’s Financial Times today chose two Kitimat related companies to highlight how western business is turning more and more to China.
Shell turns to Asian suppliers in US shale race (Registration/subscription required)
Royal Dutch Shell has said it will deploy more Chinese equipment at its struggling US shale business – becoming the latest natural resources company to try to reduce costs by switching to cheaper Asian suppliers.
Miners such as Rio Tinto and Antofagasta have already been encouraged by improvements in the reliability of Chinese machinery, which they say can now be integrated into their existing operations without compromising efficiency or safety standards….
Shell’s move comes as oil and mining companies – which ramped up capital expenditure in recent years amid a huge commodities boom – are being pressed by shareholders to curb spending and improve returns….
Rio Tinto, the Anglo-Australian miner, has also been on a spending spree in China. The company, which is slashing its capital spending after disappointing investors with cost overruns, says it made close to $2bn-worth of equipment purchases in China last year, and around $1bn-worth in India.
Rio Tinto Alcan has said that much of the building materials and equipment for the Kitimat Modernization Project has come from China, often in huge modules which are then inserted into the new buildings as part of the aluminum smelter upgrades.