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Chinese shale extraction starts in June

16th May 2012

China Petrochemical Corp. to pull shale reserves from southwestern province as part overall development of shale-oil and gas production in China.

Two shale wells — Xinglong 101 and Fushi 1 — will be the first to produce

Chinese oil giant Sinopec will begin extracting shale gas from a site in the southwestern province of Sichuan in early June, it announced this week.

The first such production in the country will be completed by two subsidiaries of Sinopec: Jianghan Oilfield and Exploration Southern Co. Jianghan Oilfield, responsible for production and output.

Exploration Southern Co. chose the Daanzhai area in Fuling for drilling, and two shale wells — Xinglong 101 and Fushi 1 — will be the first to produce.

Sinopec, the largest integrated petroleum and petrochemical enterprise in China, said the project in Fuling was significant in the overall development of shale-oil and gas production in China.

The government made shale gas a priority in its Twelfth Five-Year Plan, which covers 2011 to 2015. It wants to produce 6.5 billion cubic meters of shale gas per year by the end of 2015.

In 2010, a Sinopec subsidiary teamed up with BP PLC of the UK to explore shale gas in Guizhou Province, also in China’s southwest. In 2011, the Exploration Southern Co. conducted geological research with Exxon Mobil Corpin Sichuan Province.

On 28 April, Sinopec International Petroleum Exploration & Production Corp., a wholly owned subsidiary of Sinopec, bought a shale-oil and gas project in the United States from Devon Energy Corp. for USD 2.4 billion.