Chinese Shale Gas Target Met with Skepticism
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China’s target to produce around 3 billion cubic feet per day of shale gas by 2020, while
increasing its 1P reserves to
53 trillion cubic feet, has been met with doubt by oil and gas analysts at Tudor, Pickering,
Holt & Co (TPH & Co).
“We remain skeptical on Beijing’s 2020 target given geological/logistical issues and high
costs,” analysts said in a
research note sent to Rigzone.
“Although estimated to hold vast resources, Chinese shale gas development has been
impacted by a combination
of complex geology (high degree of faulting), high well costs, water scarcity and a lack of
technology/infrastructure,”
the analysts said.
The skepticism comes after China’s shale gas production in March reportedly increased by
50 percent year on year
to 1.3 Bcfpd, which compares with total Chinese gas production of 15.5 Bcfpd, TPH & Co
analysts revealed.
Sinopec has been described as the “clear leader” in the Chinese shale gas business, with
the firm already producing
from its Fuling asset.
Production from its Nanchuan block is expected to start next month.
IMG
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