Apr 11 - China's Fledgling Shale Gas Sector

Source Press
Company CNOOC LtdCNPCPetroChinaSinochem CorporationSinopec 
Tags Government Policy, Capital Spending, Shale Gas, Licensing Rounds, Deal Rumours, Unconventional Resources, Upstream Activities
Date April 20, 2011
(Reuters) Encouraged by the boom in shale natural gas drilling in the United States, and driven by domestic gas shortages, China has fast-tracked plans to explore the unconventional fuel, part of a massive push to boost gas consumption and cut down heavy dependence on dirtier coal.

Experts say China's technically recoverable shale gas resources are, by far, the world's biggest.

The shale gas sector is still in its infancy in China with a small number of pilot wells drilled. But it has attracted strong interest from international oil firms. ''

Chinas CNOOC LTD has concluded two gas deals with U.S. shale gas explorer Chesapeake Energy , a move that may allow it to acquire and develop the technology to extract gas from shale rock.

China's Ministry of Land & Resources (MLR) will soon hold its first auction of eight shale gas blocks. The auction is only open to domestic energy firms, including CNOOC, Sinochem, Xinjiang Guanghui, Zhenhua, PetroChina ,  Sinopec , and Shaanxi Yanchang.


The land ministry, in charge of resource registrations and management of mining rights, is target ting 50-80 shale gas prospects and 20-30 exploration and development blocks by 2020.

A research arm of the ministry also aims to locate one trillion cubic metres of recoverable shale gas reserves, build 15-30 billion cubic metres of production capacity and produce 8-12 percent of China's natural gas from shale by 2020.

PetroChina and  Sinopec, however, have set their own goals, which are more modest.

China National Petroleum Corporation (CNPC), which runs most gas and oil businesses through its listed arm, PetroChina, aims to produce 500 million cubic metres (mcm) of shale gas by 2015, a deputy general manager said in July. Sinopec aims to have combined production capacity of 2.5 billion cubic metres of shale gas and coalbed methane gas by the end of 2015.

Major oil firms have just started evaluating potential shale gas deposits. Some Chinese reports estimated the country may hold up to 30 trillion cubic metres of shale gas resources.

A U.S. Energy Information Administration report this month, however, said China had 1,275 trillion cubic feet of technically recoverable shale gas resources -- by far the largest in the world, followed by the United States with 862 trillion cubic feet and Argentina with 774.

Potential Wherabouts'

Chinas Sichuan basin, Erdos basin, Bohai Bay, Songliao basin, Jianghan basin, Tuha basin, Tarim basin and Junggar basin, mostly in the west and north, may hold shale gas.

The upstream regions of the Yangtze River valley, which include the southern and eastern parts of Sichuan province, southeastern parts of Chongqing, northern parts of Guizhou and western parts of Hubei, are likely to contain sizeable deposits, according to preliminary estimates by the land ministry.

Source: EvaluateEnergy® ©2020 EvaluateEnergy Ltd