China’s Five-year Shale Gas Development Plan Seems
Optimistic
Reference Code: GDGE0685VPT Publication Date: April 2012
1 Table of Contents
1 Table of Contents.................................................................1 1.1 List of Tables
1.1 List of Tables .................................................................1
1.2 List of Figures ................................................................1 Table 1: Shale Gas Activity in the Sichuan Basin, China,
2 Summary .............................................................................2 2009-2012 ................................................................ 5
3 China’s Five-year Shale Gas Development Plan Seems
Optimistic .............................................................................2
3.1 China has Outlined a Five-step Approach to Reach the 1.2 List of Figures
Milestones Set in the Five-year Shale Gas Development Figure 1: China’s Five-step Approach to Reach the Set
Plan 2 Milestones in the Five-year Shale Gas Development
3.1.1 China has Exploitable Shale Gas Reserves of Plan .......................................................................... 3
25.1 Trillion Cubic Meters.....................................4 Figure 2: Shale Gas in China, Major Shale Gas Reserves and
3.2 China’s Targeted Production of 6.5 Billion Cubic Meters Natural Gas Pipelines, 2012..................................... 4
of Shale Gas by 2015 Seems Optimistic .......................4 Figure 3: Depletion of Ground Water Levels in China, 2011 ... 6
3.2.1 Complex Geology of Shale Gas Reserves in
China will Affect the Five-year Shale Gas
Development Plan ................................................5
3.2.2 Shale Gas Development is Mostly Confined to
Sichuan Basin in China ........................................5
3.2.3 The Five-year Shale Gas Development Plan is
facing Several Challenges such as Water
Shortages and Inadequate Natural Gas Pipeline
Infrastructure ........................................................6
4 Appendix ..............................................................................7
4.1 Sources .........................................................................7
4.2 Methodology ..................................................................7
4.2.1 Coverage..............................................................7
4.2.2 Secondary Research ............................................7
4.2.3 Primary Research ................................................7
4.2.4 Expert Panel Validation ........................................8
4.3 Contact Us.....................................................................8
4.4 Disclaimer......................................................................8
GDGE0685VPT / Published APR 2012 /Page 1
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China’s Five-year Shale Gas Development Plan Seems Optimistic
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2 Summary Among other things, the plan envisions four milestones to be
achieved during the 2011-2015 period. Out of the four, the most
China released a five-year shale gas development plan for the important milestone is the targeted production of 6.5 billion
2011-2015 period in March 2012 with a target of reaching 6.5 cubic meters (bcm) of shale gas per year by 2015. The plan
billion cubic meters (bcm) of shale gas production per year by aims to complete the survey and appraisal of shale gas, the
2015. Additionally, the plan aimed for the completion of a two- development of required technologies, equipment and methods
year survey and appraisal of China’s shale gas reserves within for survey, appraisal, exploration and production of shale gas
the plan period, an increase in China’s expertise on before the end of 2015. Additionally, rules, policies and
technologies and equipment required for the exploration and technical standards for the regulation of shale gas development
production of shale gas, and the development of a policy in China will be formulated during the plan period. The scope of
framework for the regulation of the country’s shale gas sector. regulation includes appraisal and certification, tests and
However, the planned target of 6.5bcm of shale gas production analysis, reserve surveys, environmental measurements, and
per year by 2015 seems unfeasible, considering the complex exploration and production.
geology of the shale gas reserves in China. The complex
geology of the shale reserves implies a higher cost of 3.1 China has Outlined a Five-step Approach
development of the shale gas, discouraging companies and
to Reach the Milestones Set in the Five-
turning their focus more toward other unconventional or
year Shale Gas Development Plan
conventional sources of natural gas. Additionally, several