Petroleum Economist Maps, Books and Reports 2 | Page 4

Shale gas

Opportunity still knocks
for China’s vast shale
The country’s unconventional gas sector has struggled to live up to its promise. But its resource is
too big to be left in the ground indefinitely

I

t’s easy to knock the progress of
China’s shale-gas development, or
rather the lack of it.
Of course it is unlikely Beijing will hit
its wildly ambitious shale-gas production goals. But that’s beside the point.
The targets – 60 billion-100 billion
cubic metres (cm) by 2020 – epitomized China’s ambition.
And it’s this dogged determination
that sets China apart. Not forgetting
its Sichuan basin is the most active
play outside of North America.
However, even a modest 2015
output target of 6.5 billion cm seems
unachievable.
“It’s fair to say there maybe some
disappointments along the way,” says
Toby Hewitt, former general counsel at
unconventional specialist Dart Energy.
“But China will get there because it’s
in its strategic interest to do so and
the central government, which usually
gets what it wants, will do the necessary to make it work.”
By all accounts, China is sitting
on the largest estimated technically
recoverable shale-gas resources in the
world – pegged at 1,337 trillion cubic
feet (cf) by the US Energy Information
Administration (EIA) in its latest report
– and nearly twice the estimated size
of the US’ cache.
Quite simply, the resource – at over
30 billion tonnes of oil equivalent – is
too big for China to ignore.
China knows it has to make shale
gas work as it strives to shift from its
reliance on dirtier fossil fuels, such as
coal, to help cut the deadly pollution
that chokes its cities.
But production last year stood at
a meagre 30 million cm, data from
national oil company (NOC) China
National Petroleum Corporation
(CNPC) showed. That pales in comparison to US shale-gas production,
which af ter around ten years of
accelerated development is running at over 225 billion cm per year
(cm/y).
However, unlike the US, China
arguably lacks some of the crucial
ingredients that sparked the phenomenal leap [