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China holds largest accessible shale gas reserves – report

30th July 2012

A fifth of the world’s minable shale gas is thought to lie within China despite the resource yet to have been exploited commercially in the country due to a lack of technical and domestic expertise

The Sichuan Province is home to some of China's largest reserves. PetroChina has already awarded Shell a production sharing contract for the Fushun-Yongchuan shale gas block in the area.

China may hold the world’s largest accessible shale gas reserves, accounting for roughly 20 per cent of total resources of 187 trillion cubic meters, according to a new report.

The 2012 Foreign Petroleum Technology Development paper, published on Monday, found China contains 36 trillion cubic meters of minable shale reserves, putting the country ahead of the US (13 per cent), Argentina, Mexico and South Africa.

China plans to ramp up production efforts over the next year and could produce as much as 6.5 billion cu m of the resource by 2015, the government has said. China also plans a shale auction this year although foreign companies are not allowed to take part directly.

The reserves, however, have attracted huge interest from major international companies such as Shell and Gazprom. Russian technicians, for example, arrived in China earlier this month to visit shale natural gas fields in the Sichuan province, currently under the control of China National Petroleum Corp.

Alexander Medvedev, deputy chairman of Gazprom, has also met with CNPC's vice president Wang Dongjin to discuss partnerships in the energy sector.

"As part of experience sharing, the parties agreed to assign a group of Gazprom's technical experts to the shale gas fields being currently developed by CNPC," Gazprom said in a statement.

Gazprom and CNPC signed a strategic cooperation agreement in 2004. Russian officials said trade between the countries could reach USD 200bn within 10 years.

Shell has also made clear it intends to invest heavily in Chinese shale. On Tuesday it emerged the oil giant planned to pour USD 500m in 2012 drilling in shale gas and tight gas acreage in China.