Chinese Plan Outlines Shale Gas Development

China is projecting that its annual output of shale gas will reach 6.5 billion cubic meters (628,600 Mcf/day) in 2015, followed by further dramatic rise, to 60 billion-100 billion cubic meters annually by 2020.

A five-year shale gas development plan drafted by the National Energy Administration and issued by the National Development Reform Commission, sees the establishment of 19 shale development zones.

The report encourages Chinese companies to work with foreign companies and research institutes with expertise in exploring and producing unconventional natural gas resources.  The plan also promised supportive financial policies and subsidies for shale gas, including price subsidies, preferential tax treatment and land subsidies.

Chinese authorities stressed the environmental benefits of shale gas production. If the projected 2015 output of gas were to replace coal in generating generate electricity, annual emissions of carbon dioxide would be cut by 14 million metric tons, sulfur dioxide by 115,000 tons and nitrogen oxides by 43,000 tons.

The U.S. Energy Information Agency has an estimated that China has the largest repository of shale gas in the world at 1,275 trillion cubic feet of technically recoverable shale gas reserves.

Ministry of Land and Resources Vice Minister Wang Min reportedly placed China's shale gas resources are estimated at 31 trillion cubic meters, equivalent to its reserves of conventional natural gas.