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China unveils new benefits to encourage shale exploration

08th November 2012

The Chinese ministry of finance will offer 0.4 yuan per cubic meter of shale gas developed in the next three years

China unveils new benefits to encourage shale exploration
Beijing hopes to produce 6.5 billion cubic meters of shale gas by 2015 and as much as 100 billion by the end of the decade

China’s ministry of finance on Monday announced the government will offer 0.4 yuan per cubic meter of shale gas developed and consumed between 2012 and 2015. The move comes hot on the heels of a wider range of economic measures which Beijing is set to implement to boost shale gas exploration in the country.

Beijing has made shale gas a national priority, as turning to shale gas exploration could help the world’s top energy consumer improve its energy efficiency. Beijing hopes to produce 6.5 billion cubic meters of shale gas by 2015 and as much as 100 billion by the end of the decade. The country's second shale gas licensing round this year of 20 blocks elicited substantial interest from more than 100 domestic companies, including Sinopec and PetroChina.

China may hold the world’s largest accessible shale gas reserves, accounting for approximately 20 per cent of total resources, or 36 trillion cubic meters of minable shale reserves – enough to meet its gas consumption for the next 200 years, according to Moody’s.

The country’s technological challenges are unique – experts say China's reserves are buried deeper than US shale gas, the majority clustered in mountainous and arid regions which present more complex geological challenges. Technological innovation will therefore be crucial to China’s ambitious plans, in order to make shale gas development safe and efficient. Several state owned Chinese petrochemical companies such as Sinopec and PetroChina have already made efforts to reach overseas owners and developers to have access to foreign expertise.

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