China continues to explore its mountainous regions for shale gas, hoping to confirm the reserves needed to help boost production in the world’s second largest shale gas producing country.

Though shale gas production this year is well below government targets, industry officials remain upbeat and have set an even more aggressive production target for 2025.

Ministry of Natural Resources official Zhang Dawei told the recent 10th Asia Pacific Shale Gas & Oil Summit, held by Energy China Forum in Shanghai, that the country is looking to boost shale gas output to between 50 billion and 80 billion cubic metres per year by 2025 as part of China's 14th five-year economic development plan, which starts next year.

China is also looking to increase its proven in-place shale gas reserves to 6.5 trillion cubic metres by 2025, said Zhang, a director in the ministry's Consulting & Research Centre, though he added that targets have yet to be confirmed.

“China has so far not yet met its production for unconventional gas,” Zhang said, adding that shale gas output this year is set to come in at 20 Bcm, well below the target of 30 Bcm.

Key to achieving the new target is increased investment and technical innovation, he added.

The focus areas for shale gas exploration and development are in the southern and eastern parts of Sichuan province, the north-west of the Yunnan province, and in the Ordos basin.

Southwest Oil & Gas Field Company, owned by China National Petroleum Corporation, is leading the country’s shale gas exploration and development drive in the Sichuan basin.

The company has added 300 new shale gas wells this year, which will be able to boost production by 1 Bcm.

It is now also operating 160 land rigs and 30 hydraulic fracturing units for shale gas production.

A new plan calls for Southwest to boost local gas production to 80 Bcm by 2030, including 40 Bcm of conventional gas and another 40 Bcm of shale gas.

To this end, Southwest will need to drill 300 shale gas wells to increase shale gas production by between 2 Bcm and 3 Bcm per annum.

By the end of last year, China had confirmed 384 Bcm of shale gas reserves with production hitting a record high at 15.38 Bcm, according to Zhang.

The MNR has issued 54 shale gas exploration and development licenses to Chinese companies covering 871 square kilometres.

Shale

China sets sights on ambitious targets for shale gas output