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Shell in row over Karoo gas

ENERGY giant Royal Dutch Shell is targeting potential untapped shale gas reserves in coal-hungry South Africa where landowners - including a Dutch princess - are readying for a showdown.

Shell applied in December to explore 90000km² - twice the size of Denmark - for gas deposits in the clay-like shale rock of the arid central Karoo.

But more than 200 people want the application dropped, including landowner Dutch Princess Irene, due to environmental concerns and the use of hydraulic fracturing or "fracking" to release viable deposits if discovered.

The Anglo-Dutch giant, whose 2010 net profits nearly doubled to $18,6billion (about R134billion), is one of several companies interested in the Karoo where gas finds in the 1960s were technologically and economically unviable to exploit.

Sasol is in early studies in a joint venture, while American firm Falcon Oil & Gas, and Bundu Gas and Oil are also eyeing other chunks of the Karoo.

Shell, which will submit an environmental management plan to the state's Petroleum Agency SA (Pasa) in April, says its track record shows safe use of the technology and that opposing views will be considered.

The area's potential will only be known once exploration starts but, if viable, the Karoo will have a major impact on energy supply with early conservative estimates above 141 trillion litres of gas, said Pasa chief executive Mthozami Xiphu.

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