China to carry out large-scale shale gas production by 2015

Want China Times, Staff Reporter 2013-11-17

A CNPC plant in Guangxi province. (File photo/Xinhua)

More than 100 million cubic meters of shale gas has been extracted in China this year, according to China's Ministry of Land and Resources. The second round of shale gas development is also expected to begin its first drilling in late November, according to our Chinese-language sister newspaper Want Daily.

An official with the ministry said that as of September, 142 boreholes have been dug to extract shale gas across the country. Most of them are located in Sichuan province and Chongqing municipality. All of them are owned by three state-owned companies: China National Petroleum Corporation (CNPC), Sinopec and Shaanxi Yanchang Petroleum.

CNPC and Sinopec plan to increase their shale gas production to 2.5 billion and 5 cubic meters, respectively, by 2015. If the excavation continues at present speeds, the companies may be able to reach the 6.5 billion-cubic-meter target set in the 12th Five Year Plan or even exceed it by up to 3.5 billion cubic meters, said the official.

The goal is yet lofty. Businesses that won the bid to carry out the second round of shale gas development are being accused of a sluggish start. They have only begun excavating shale gas this year after the result of second round bidding was announced in Nov. 2012.

Most of them have been constructing earthquake-resistant facilities and will begin the first drilling by the end of November. Whether a third round of bidding will be held before the end of the year is not clear, said the official.

China is said to hold the world's largest reservoir of shale gas. Royal Dutch Shell has jointly worked with Sinopec to drill an exploration well Liye-1 in central China. Shell is also collaborating with CNPC to evaluate the Fushun-Yongchuan block and is considering commercial production next year.