BEIJING Aug 24 China last week launched its
first national shale gas research centre to support the country's
development of the fuel. [ID:nTOE67M01O]
Encouraged by the boom in shale natural gas drilling in the
United States and driven by recurring domestic gas shortages,
China has fast-tracked plans to explore the unconventional fuel
in its homeland.
Early 2010, a research arm of the Ministry of Land and
Resources (MLR) set a target for the country to identify 50-80
shale gas prospects and 20-30 exploration and development blocks
The Strategic Research Centre for Oil and Gas of MLR also set
a goal 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 gas wells by 2020.
MLR's targets can be a reference to the industry, dominated
by power energy giants PetroChina (0857.HK)(601857.SS)(PTR.N) and
Sinopec Corp (0386.HK)(600028.SS)(SNP.N), each of which has set
their own goals to develop the frontier resource.
State-owned China National Petroleum Corporation (CNPC),
which runs most gas and oil businesses via listed PetroChina,
aims to produce 500 million cubic metres (mcm) of shale gas by
2015, a deputy general manager said in July.[ID:nTOE66300A]
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 in parts of the country though some Chinese reports
estimated that the country may hold up to 30 trillion cubic
metres of shale gas resources.
China's 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 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 oil and gas research
centre under the Ministry of Land and Resources.
* August 2010, ConocoPhilips (COP.N) was reported to be in
advanced talks with PetroChina over the development of a 3,000
square kilometres shale gas block between Chengdu, capital of
southwestern Sichuan province, and Chongqing municipality.
* June 2010, Sinopec's southern exploration unit set up a
shale gas exploration arm that eyes exploration breakthrough in
2-3 years and start industrial-level development of the gas in
* May 2010, government officials said Beijing will likely
offer subsidies and tax incentives to shale gas production,
similar to that of coal seam gas whose production enjoys up to
0.33 yuan ($0.0485) per cubic metres of financial aid. But such
policies have yet won final government approval.
* May 2010, Sinopec said shale fracturing at its Fangshen 1
well in Guizhou province was a success, the first such operation
in China. The firm did not give further details.
* May 2010, China and the United States announced the two
nations would cooperate in areas including shale gas, smart grid,
clean coal, renewable energy, nuclear power and electric cars.
* January 2010, Sinopec was reported in talks with BP (BP.L)
over potential cooperation in the exploration and development of
a 2,000-square-kilometre shale gas block in Kaili in Guizhou
province and a 1,000-square-kilometre block in Huangqiao in the
northern part of Jiangsu province.
* November 2009, the Strategic Research Centre for Oil and
Gas under the Ministry of Land and Resources drilled a test well
in southwestern Chongqing and confirmed shale gas deposits.
* November 2009, PetroChina and Royal Dutch Shell (RDSa.L)
reached an agreement to jointly evaluate shale gas reserves of
the Fushun-Yongchuan block in Sichuan basin.
* October 2007, Houston-based Newfield Exploration Co (NFX.N)
signed a deal with PetroChina to evaluate shale gas resources at
the Weiyuan field in the Sichuan basin in southwestern China.
(Reporting by Jim Bai and Aizhu Chen; Editing by Ken Wills)