China Huaneng Starts Shale Gas Drilling in Chongqing

Electricity producer China Huaneng Group has commenced drilling its first shale gas well in Youyang East block located in Chongqing municipality, the company said in a statement on August 20.

The well depth will be 3,895 metres. The company will invest 50 million yuan ($8.12 million) in developing the well. Drilling is expected to be complete by 26 November. 

The drilling and subsequent logging, core analysis and test mining will provide data about stratigraphic sequence, thickness, lithology and layer deposition to help evaluate the block’s resource potential, the company said.

Exploration rights for the Youyang East block was won by Chongqing Mineral Resources Development, a unit of local government-backed Chongqing Energy Investment Group, in China’s second auction of exploration licences in 2012.

In 2013, China Huaneng gained access to the shale block by increasing its equity share in Chongqing Mineral Resources Development from 29 percent to 65 percent.  

The company plans to use the gas produced at Youyang for power generation.