China is expected to produce more than 6.5 billion cubic meters of shale gas by 2015, probably reach 10 billion cubic meters, said Zhang Dawei, an official from the Ministry of Land and Resources.

Zhang said China’s first round of shale gas production has made significant breakthroughs as CNPC and Sinopec both started extracting shale gas in their blocks. The second round involves 19 blocks and drilling is expected to begin around late November.

The shale gas outputs for CNPC and Sinopec are estimated at 2.6 billion cubic meters and 5 billion cubic meters respectively by 2015, “given the production goals of CNPC and Sinopec, I am very optimistic that China can produce more than 6.5 billion cubic meters of shale gas by 2015,” Zhang said.

China expects to extract about 200 million cubic meters of shale gas this year. Industry insiders have cast doubts on China’s shale gas boom, speculating that China is unable to reach the target of 6.5 billion cubic meters by 2015.

In August, Caixin news portal quoted Zhang as saying that “As we are facing enormous cost pressures and other problems, the speed of exploration has been slower than anticipated.” However, exploration has accelerated afterwards and the introduction of new shale gas industry policy will attract private investment into the sector.

The country has 142 wells as of September, mostly located in Sichuan and Chongqing. So far only three state companies – CNPC, Sinopec and Shaanxi Yanchang Petroleum – have successfully extracted shale gas. China will invest 3 billion yuan ($492 million) next year to drill 40 to 60 wells.


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