China Has Proven Shale Gas Reserves of More Than 500 Bcm

China's proven reserves of shale gas have exceeded 500 billion cubic meters, according to a China Geological Survey (CGS) official.

The Zhai Gangyi, a senior expert with CGS, added that Fuling gas field, developed by Sinopec Corp., has little over 38 billion cubic meters of proven shale gas reserves, Xinhua Finance Agency reported Thursday.

Sinopec is aiming to build 5 billion cubic meters and 10 billion cubic meters of shale gas production capacity in Fuling area by the end of 2015 and 2017, respectively. Last year, Sinopec’s Fuling field was verified by Chinese government as country’s largest shale gas play. 

There are four main shale gas production areas in China: Fuling, Changning, Weiyuan and Yanchang. Currently, their combined output capacity tops 6 billion cubic meters per year, according to Zhai.

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.