Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.

  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list
Natural Gas

China could meet 2015 shale gas target on Sinopec, CNPC efforts: analysts

Metals | Steel | Raw Materials

India's steel sector: turning a corner or facing more hurdles ahead?

LNG | Natural Gas | NGL

Platts LNG Alert

Energy | Electric Power | Renewables | LNG | Natural Gas | Fuel Oil | International Public Finance

Central American Energy Conference, 23rd Annual

LNG | Natural Gas

India LNG buyers spoilt for choice as China woes create problem of plenty

China could meet 2015 shale gas target on Sinopec, CNPC efforts: analysts


Recent progress at shale gas projects operated by China's state-owned giants Sinopec and China National Petroleum Corp. suggest the country is on track to meet the 2015 production target set by the central government, analysts said Monday.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

China is targeting shale gas output of 6.5 billion cubic meters/year by 2015 and 60 billion-100 billion cu m/year (5.8-9.7 Bcf/day) by 2020 under its official plans.

Analysts had earlier criticized these targets as unrealistic given the huge challenges facing operators in China's nascent shale gas sector.

The country's total shale gas output in 2013 was just 200 million cu m, the Ministry of Land and Resources said in January.

Sinopec, or China Petroleum and Chemical Corp., said Monday it has signed a strategic cooperation agreement with the municipal government of Chongqing to work on exploration, development and construction of transmission and distribution infrastructure.

The pact was signed Saturday and included an agreement on the Fuling project, located in the Sichuan Basin in Chongqing in southwest China.

Sinopec is planning to produce 5 billion cu m/year of shale gas from the project by 2015, after raising its target last year from an original 1 billion cu m/year by 2015. Output at Fuling, coupled with production from other projects, should make the 2015 target achievable, said one upstream analyst in Singapore.

"By then CNPC should be able to produce 1 billion-1.5 billion cu m/year of shale gas," he said, referring to China National Petroleum Corp., China's largest upstream producer.

CNPC's listed subsidiary PetroChina had said in August 2013 that it expects to produce 1.5 billion cu m/year of shale gas by 2015, out of total unconventional gas output of 27.8 billion cu m/year.

Last Thursday, Shanghai Securities News reported that CNPC has completed the preliminary development plan at its Changning-Weiyuan block in Sichuan province. The block had originally been established as a shale gas development demonstration zone in March 2012.

Nine wells are currently in trial production and eight more are expected to be brought online this year, the report said. By 2015, 110 new wells are likely to be commissioned at Changning-Weiyuan. LONGER-TERM TARGET STILL UNCERTAIN

While there is now more optimism about the 2015 production target, uncertainty still looms over China's longer-term ambition to produce up to 100 billion cu m/year of shale gas output by 2020.

The current focus of Sinopec's shale gas efforts has been on the Fuling shale gas project and the company was very lucky to find gas, the analyst said. "It is not that it has made technological breakthroughs that can be applied in other areas."

"Aside from these two projects, the long-standing challenges with developing shale gas in China remain," another Beijing-based analyst said.

Both domestic and foreign companies have had to grapple with both above and below-ground risks in China, including complex geology, deep reservoirs, midstream bottlenecks such as inadequate access to pipelines and government price controls on natural gas which make development financially challenging.

Progress made by foreign companies has not been as encouraging as by their state-owned counterparts.

Chevron recently said it drilled two shale wells in the Qiannan Basin in Guizhou province but both were disappointing.

Shell is believed to be still progressing appraisal work at its Fushun Yongchuan block in partnership with CNPC nearly two years after it signed a production sharing contract for the acreage. That was the first PSC for a shale gas block in China and none has been awarded since.

--Song Yen Ling,
--Edited by Wendy Wells,