Shale gas production in the future may reach 100 billion cubic meters

U.S. media claimed that China is sitting on the world’s largest reserves of shale gas, and it will exceed the 2015 mining target, because the new projects in the southwestern part of the country and the prospect of new investment will make the government’s goals seem obsolete.

The United States' Bloomberg News reported on March 12 that China Petroleum & Chemical Corporation had previously reached an agreement with the local government of Fuling that by 2015, the shale gas capacity of the Fuling Project will reach 5 billion cubic meters. This means that 6.5 billion cubic meters of national targets will soon be exceeded.

According to Shi Yan, analyst of UOB Jixian Holding Co., Ltd. in Shanghai, “China can easily achieve the 2015 target, which is mainly attributable to the accelerated development of the Sinopec Yanling Project”. The contribution of other shale projects will increase production to 100 billion cubic meters.

According to the report, although China's reserves are about twice that of the United States, its production target is very low compared with the United States, and the United States produced 266 billion cubic meters in 2012. The lack of high-cost, complex terrain and infrastructure hinders development and it is doubtful whether the existing goals can be achieved. As people’s concerns about coal-burning pollution increase, China is working harder to promote the development of potential shale resources.

Gordon-Guan, head of the oil and natural gas research area of ​​Hong Kong Branch of Nomura Holdings, said: “China is about to reach its 2015 target, especially when Sinopec’s production capacity suddenly rises.” He said China Petrochemical Corporation will produce in 2015. Up to 2 billion cubic meters of shale gas.

The Ministry of Land and Resources of China pointed out that in 2013, the annual output of shale gas in China surged more than five times, reaching 200 million cubic meters per year. According to reports, China consumed 169 billion cubic meters of natural gas in 2013, about one-third of which came from imports.

The report said that the National People’s Congress held in Beijing will end soon. At the meeting, both Fu Chengyu of Sinopec and Zhou Jiping of PetroChina stated that as part of the government-sponsored reforms, they will release shale development from private investment.

Neil Beveridge, a senior analyst in Hong Kong, said that the joint efforts to achieve the 2015 goal can be achieved. However, he believes that to achieve China's more ambitious goal, that is, to reach 60 billion to 100 billion cubic meters of production by 2020, "some effort" is needed.