China energy authority drafting shale gas development plan: NDRC

BEIJING Mon Mar 28, 2011 1:03am EDT

BEIJING (Reuters) - China is drawing up a national shale gas development plan and aims for commercial production of the alternative fuel as early as possible as it gears up to boost cleaner energy consumption and reduce reliance on carbon-intensive coal.

The National Energy Administration (NEA) is drafting the plan, studying relevant policies and establishing a pilot shale gas development area, according to a report posted on the National Development and Reform Commission's website (www.ndrc.gov.cn).

The government has also set up a special research project for key shale gas exploration and development technologies, Liu Tienan, the head of the NEA, was quoted as saying during a recent meeting with Royal Dutch Shell chief executive Peter Voser.

The report did not provide more details on the plan or when it may be finalized.

Shell is drilling 17 wells, including for tight gas and shale gas, in China and plans to spend $1 billion a year over the next five years on shale gas in China if its exploration works under way prove a success.

China is the early stages of developing shale gas and does not have any reliable reserves estimate of the alternative fuel.

(Reporting by Jim Bai and Tom Miles; Editing by Jonathan Hopfner)