China shale gas production hit 200m cubic metres in 2013

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08 Jan 14 | Author Saleha Riaz | Research, Trends & Technology | [color=rgb(208, 127, 128) !important]Asia-Pacific

According to China’s Land and Resources Ministry, the country’s shale gas production went up by more than five times last year, totalling 200 million cubic metres in 2013 compared to 30 million in 2012, and it hopes to hit 6.5 billion by 2015.

Bloomberg has reported that this is in part due to PetroChina and Sinopec Group who have built new production capacity of 600 million cubic metres. The latter plans to produce 3.2 billion cubic metres from its Fuling block in 2015, doubling its previous target.

China’s government is trying to encourage shale development to meet rising gas demand by prioritising land approvals, allowing tax-free imports of equipment and offering subsidies to explorers.

The country is producing over 2 million cubic metres a day of shale gas, according to the National Energy Administration.

According to Gordon Kwan, the regional head of oil and gas research at Nomura Holdings in Hong Kong:

“Long term, we believe the government must raise domestic selling prices for natural gas and increase shale-gas subsidies further to motivate producers.”

However, the target of 6.5 billion cubic metres may not be a realistic one because development has been slow, according to Zhang Yousheng, a researcher with the National Development and Reform Commission.