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China’s 2013 Shale gas output rises to 200 MMcm

BEIJING (Bloomberg) -- Shale gas production in China, holding the world’s biggest shale reserves, surged by more than five times last year to 200 MMcm, according to the Land and Resources Ministry.

PetroChina’s Changning-Weiyuan and Fushun-Yongchuan areas, along with the Fuling block operated by Sinopec Group, have built new production capacity of 600 MMcm, the ministry said in a statement on its website. Output was about 30 MMcm in 2012, according to Bao Shujing, a director at the ministry’s geological research bureau.

China’s government has pledged to spur the shale industry’s development and meet rising gas demand by prioritizing land approvals, allowing tax-free imports of equipment and offering subsidies to explorers. The country is pumping more than 2 MMcmpd of shale gas, the National Energy Administration said on its website.

Sinopec plans to produce 3.2 Bcm from Fuling in 2015, doubling its previous target, it said.

Oil and natural gas output hit record highs last year, according to the ministry. Production of crude rose 1.8% to 210 MMmt while conventional gas increased 9.8% to 117.7 Bcm.

PetroChina and Sinopec’s output may determine if China will reach its 2015 shale-gas production target of 6.5 Bcm, said Gordon Kwan, the regional head of oil and gas research at Nomura Holdings in Hong Kong.

“Long term, we believe the government must raise domestic selling prices for natural gas and increase shale-gas subsidies further to motivate producers,” he said by e-mail.

That target may be hard to reach as development has been slow, Zhang Yousheng, a researcher with the National Development and Reform Commission, said on October 16.



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