China to Produce Shale Gas by 2015
Chinese production of shale gas may begin before the end of 2015 according to Che Changbo, deputy director of the Ministry of Land and Resource’s oil and gas strategy center.
The country has drilled more than 10 wells and signed several cooperation agreements with foreign companies to develop the resource, according to Che.
China wants to triple the use of natural gas to about 10 percent of its energy consumption by 2020 as it cuts reliance on more polluting coal. China has brought in foreign partners including Royal Dutch Shell and Chevron to assess its shale potential and acquired overseas shale gas assets to gain expertise in producing the hard-to-extract resource.
“We need to accelerate the verification of reserves, improve technology and enhance the ability of manufacturing equipment” needed to extract shale gas, Che said. “We should expand cooperation with foreign companies to achieve all that.”
China’s state-owned energy companies have spent more than $6 billion on North American shale-gas assets in the last three months, six times what was spent in 2010. Companies leading the country’s shale gas projects include: China National Petroleum Corp., China Petrochemical Corp. and China National Offshore Oil Corp.
China’s Vast Reserves
China may have 920 trillion cubic feet of potential shale-gas resources.
Deposits of shale gas in China are 12 times more than conventional gas reserves in the nation, the U.S. Energy Department said in a report on April 5.
Chinese shale gas reserves that are “technically recoverable” stood at 1,275 trillion cubic feet compared with 107 trillion in proven gas deposits in 2009, according to the report. That’s more than 862 trillion cubic feet of reserves in the U.S. and 19 percent of the world’s 6,622 trillion cubic feet.
As stated by Che, “Once we start large-scale production, shale gas won’t be an unconventional fuel for China anymore and it will play an important role to supply China’s energy needs.”
China completed its first horizontal shale gas well after 11 months of drilling, according to a CNPC report in March. Chuanqing Drilling Engineering Co., a unit of CNPC, conducted the operation and no foreign venture partner was mentioned, according to the report.
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