User:Sunshine08yan/Shale gas development in China

'Shale gas development in China' In June, 2013, the US Energy Information Administration (EIA) has estimated that China’s shale gas recoverable reservoirs is around 31 tcm [1], putting China in the world’s first position.The majority of China’s shale reserves are in 3 basins – Sichuan, Tarim and Yangtze Platform, accounting for 89% of the estimated national reserves[2]

China sees shale gas development as its long-term strategy to overcome its high dependency on imported gas. On one hand,the country shifts from coal-based energy to cleaner energy sources. In 2011, 70.4% of China’s energy consumption came from coal, 17.7% from oil and only 4.5% came from natural gas [2]. On the other hand, it is a long run strategy for China to reduce its dependency on imported gas resources. In the last three years, the national consumption for natural gas has far exceeded domestic production. e.g.In 2011, China domestic consumption of natural gas was 147 bcm, and the production was only 107 bcm. The gap of 40 bcm, or 27% of national consumption, was filled by importing[3].

The need to grow domestic output of unconventional gas production has been recognized both by the government and private sectors, thus giving significant impetus to the development of shale gas extraction

Although China faces several challenges to develop efficient shale gas extraction,such as the geology and terrian are much more complex than that of USA, lack of water resources, immature expertises,etc., and large scale commercial production of shale gas has yet to begin, the government is optimistic about China’s future shale gas production. The Ministry of Land Resources has set aggressive targets of 6.5 bcm/yr by 2015 and at least 60 bcm /yr by 2020[4].

To support the industry, China has held two auctions to kick-start the shale gas extraction development with over 20 shale gas blocks being leased to 18 companies. With the slow progress of the initial leaseholders, the third auction is expected to take place in late 2013, or early 2014. Together with the auctions, the government also issued several related regulations and policies, including production and infrastructure construction goals and subsidies to boost the development of shale gas.