Shale gas production in China this year may fall more than 1 billion cubic meters short of the government’s goal.
Sources with direct knowledge of the matter told Bloomberg PetroChina Co. is on track to produce about 1.6 billion cubic meters of shale gas this year, far below its previously announced 2.6 billion cubic meter target.
The company told Bloomberg last October that it expected to achieve or beat its 2015 production estimates.
China Petroleum & Chemical Corporation, China’s second largest oil and gas producer, is slated to pump about 3.5. billion cubic meters of shale gas.
The company is also planning an expansion project that will add about 1.5 billion cubic meters per year of capacity, Bloomberg said.
The two companies are expected to produce about 5.1 billion cubic meters this year, well short of the 6.5 billion cubic meter target for 2015 that China announced in 2012.
According to Bloomberg, shale gas production from the two companies accounts for nearly all of China’s unconventional gas output.
While Chinese officials had hoped the country would experience a shale boom on par with the one seen in the United States a lack of infrastructure, low gas prices and slow demand growth have curbed shale development.
According to the U.S. Energy Information Administration, China had 1,115 trillion cubic feet of recoverable shale gas resources as of 2013, the second largest reserves in the world and just shy of the 1,161 trillion cubic feet of reserves in the United States.
Most of China’s shale efforts have been focused on the Longmaxi formation in the Sichuan Basin, located in south-central China.
State-owned CNPC had drilled 125 shale wells as of June, bringing 74 of them into production while Sinopec completed 75 test wells at the Fuling field in 2014, with plans to drill an additional 253 wells, the EIA said.