Chain Unveils Four Shale Gas Fields

China on Tuesday unveiled four more shale gas with commercial potential, reported a TV channel Wednesday.

"The abundance of shale gas reserves in China is encouraging. There's one field, which is only 3,800 square meters in scale, but has 3,800 cubic meters of shale gas. That's a treasure," Zhai Gangyi, oil & gas director of China Geological Survey (CGS) told CCTV without giving further details.

Earlier this month CGS said China's proven reserves of shale gas have exceeded 500 billion cubic meters (bcm).

CGS data shows China has issued 54 licences for shale gas exploration, covering 170 thousand square meters of fields, CCTV said Thursday.

"The production of shale gas in China in 2014 was six times the amount in 2012, hitting 130 million cubic meters. This year, the production is set to be over 5 billion cubic meters. That means China will become the world's third largest shale gas producer," CCTV quoted Ren Shoumai, researcher of China Geological Survey as saying.

Chinese government has been instrumental in aiding the shale gas industry. In a report published in September, US Energy Information Administration (EIA) said that as Chinese companies gain experience producing from shale, the cost of shale gas drilling has declined. By mid-2015, the cost of drilling a horizontal well in shale formations in the Sichuan Basin was between $11.3 million and $12.9 million per well, EIA said citing China National Petroleum Corporation's Economics and Technology Research Institute.

However, certain policy issues such as price controls amid slowing demand for energy are posing challenge for the sector.

More market oriented shale gas production would help China ease carbon emissions and pollution, and would also spark broader resource industry reforms for a more sustainable economic growth, CCTV said.