The government has announced plans to involve corporations in the exploration and development of its shale gas based on significant forecasts of its reserves.
As the world's second largest energy consumer, China is now going to great lengths to find clean and unconventional methods to meet the countries booming demand. One of the ways it hopes to do so is by utilising its potentially huge shale gas reserves, which according to a report by the U.S. Energy Information Administration could be as much as 36 trillion cubic metres.
In order to promote development of the technology needed for large-scale exploration, China is treating shale as a “separate resource” and has opened up bidding to domestic “companies with strong financial standing.” In June, Sinopec Group and Henan Provincial Coal Seam Gas Development Utilization Co. Ltd. won the first ever shale gas tender.
The government also aims to bring smaller corporate players into the industry by offering pricing incentives, subsidies and special funds based on the reserve forecasts. According to Reuters, a second tender is likely to be issued this year.
Director of the National Energy Administration's Oil and Gas Department, Zhang Yuqing, says China aims to realize commercial shale gas production by as early as 2015, with an accelerated growth period between 2016 and 2020. The government also aims to double its natural gas consumption from 4% to 8% by 2015, with a view to tripling it to 12% by 2020.