* Says has found shale gas
* Vice-chairman tempers recent optimism
* Commercial production seen taking time
By Tom Bergin
DOHA, Dec 8 PetroChina said a
new shale gas find in Sichuan province would be difficult to
convert to commercial production because Chinese geological
conditions were more difficult than in the United States where
the industry developed.
"We have made a discovery already. The problem is how to
make the production stable, how to increase the production, this
needs technology," Zhou Jiping vice-Chairman & President,
PetroChina told a press conference at the sidelines of the World
Petroleum Congress in Doha.
Yet he said he was 'confident' that, in time, commercial
shale gas production would commence.
On Tuesday, Reuters revealed Royal Dutch Shell Plc, which is
a partner of PetroChina on shale gas exploration in a Sichuan
block, had found shale gas there.
On Wednesday, Fu Chengyu, chairman of state-controlled China
Petroleum & Chemical Corp (Sinopec)
, predicted China's shale gas production would surpass
that of the United States within a decade.
U.S. energy markets were transformed by the development of
shale gas, from a position of natural gas shortages to a point
where companies are planning to export gas to Asia and looking
at new uses for gas, such as, as an auto fuel.
The optimism around Chinese shale has been stoked by a U.S.
Energy Information Administration report in April which said
China had 1,275 trillion cubic feet (tcf) of technically
recoverable shale gas resources -- by far the largest in the
world, followed by the United States with 862 tcf.
However, in industry jargon, "resources" only infers a
potential or theoretical asset, and PetroChina's Zhou cautioned
against reading too much into such statistics.
"Resources are not equal to reserves," he said, using the
industry term for established amounts of oil and gas.
Stronger tectonic movement in China meant existing
techniques may not be applicable.
"We need to speed up innovation," he said.
PetroChina has other challenges. The location of its find is
much drier than U.S. shale gas provinces, and large volumes of
water are required to fracture or "frack" the shale formations,
to release the gas.
Also, Zhou said the Sichuan province was more densely
populated than the U.S shale gas heartlands, such as Wyoming,
which would also slow development.