State energy giant PetroChina plans to increase the natural gas output from its shale operations in the Sichuan province twofold to over 22 billion cubic meters in the next five years, Reuters reported, citing state Chinese media.
China has been looking to boost domestic natural gas production in the face of rising demand and with it, rising dependence on imports. Most recently, Beijing eased restrictions on foreign companies to invest in the country’s gas industry and offered subsidies for natural gas developments.
The incentives include extending the period for exploration for the companies to five from three years, and allowing foreign oil and gas firms to directly operate in the country as long as they have an office registered in China.
China has abundant shale gas reserves, but the geology is tricky, making the development of these reserves challenging. Despite the challenges, PetroChina alone last year announced new additions of almost 741 billion cubic meters to its shale gas reserves in the Sichuan province.
This year, PetroChina drilled more than 240 new wells in Sichuan, which boosted its daily gas production in the province by 40 percent. Earlier this month, the state major announced a new shale gas discovery in the Xinjiang province, with reserves estimated at more than 100 billion cubic meters.
The other state energy major, Sinopec, also has ambitious plans for natural gas, expecting total output of 30 billion cubic meters this year, to rise to 40 billion cubc meters by 2023, representing half of the company’s total hydrocarbons production.
Boosting domestic gas production, including from shale deposits, has become essential for China as it has seen its gas imports rise from 15 percent of supply in 2010 to as much as 45 percent in 2018. Thanks to its efforts in this respect, Rystad Energy recently reported that China will become the top market for seismic exploration onshore over the next two years, while exploration activity remains subdued elsewhere in the world.
By Irina Slav for Oilprice.com
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