China to speed up shale gas production

By 2015, China plans to produce 6.5 billion cubic meters of shale gas annually, said in a five-year plan released in Beijing.

On Friday, Chinese National Commission for Development and Reform has published a five-year plan for the extraction of shale gas in the country. It is assumed that by 2015 the production volume will amount to 6.5 billion cubic meters a year, and to reach 60-100 billion cubic meters by 2020, although up to now China has never produced shale gas commercially.

As stated in the document, by 2015 the volume of recoverable reserves of shale gas in China will reach 200 billion cubic meters. However, as recognized by the authorities themselves, for the successful implementation of the plan, China needs technological know-how, which, in particular, was controlled by the West.

Therefore, in this five-year plan the Chinese government encourages local corporations to cooperate with foreign oil companies and research institutes. By the way, as it became known on Friday that China Shenhua Geological Exploration is already in talks with Norway’s Statoil for joint projects on shale gas. In addition, the plans of local authorities to provide companies producing shale gas with subsidies, reduce tariffs on imports of technology and licensing fees, as well as easier to obtain permits for exploration.

According to the Chinese Ministry of Land and Natural Resources, the country has 25.08 trillion cubic meters of shale gas. It is assumed that the second auction for the licenses of shale gas production will be hold in April and May (the first was held in June 2011).