China Next Batch Shale Gas Auction Likely In July-August

China will likely auction exploration rights for 20 shale-gas blocks in July and August, with 17 companies apparently planning to submit bids, Dow Jones said citing a report in China Securities Journal.

Companies with registered capital of at least CNY300 million ($48 million) and demonstrated expertise in shale-gas exploration will be eligible to participate in the auction, the report said.

During the process, domestic private players will be allowed to participate.

Although state-owned companies will still be major bidders, private domestic companies will also be allowed to participate, it said.

Companies likely to participate are China National Petroleum Corp., China Petroleum & Chemical Corp., China Huadian Corp. and China Datang Corp.

Chinese government held its first shale gas auction in June 2010, with six state-owned companies bidding for exploration rights at four blocks. Sinopec and Henan Provincial Coal Seam Gas Development & Utilization Co. won the rights to explore one block each, according to the China Securities Journal report.

China has an estimated 25.08 trillion cubic meters of potentially recoverable shale gas reserves, according to the Ministry of Land and Resources.