China's "shale gas revolution" cooling 2020 production target plummeted

Abstract China's shale gas revolution still has a long way to go. Recently, Wu Xinxiong, director of the National Energy Administration, said at the National 13th Five-Year Energy Planning Work Conference that by 2020, shale gas and coalbed methane production will reach 3
China's shale gas revolution still has a long way to go.

Recently, Wu Xinxiong, director of the National Energy Administration, said at the National 13th Five-Year Energy Planning Work Conference that by 2020, shale gas and coalbed methane production will reach 30 billion cubic meters.

This data has been reduced by half compared to the shale gas production outlook mentioned by the National Energy Administration in the 12th Five-Year Plan for shale gas in 2012. In fact, after the production target was put forward at the time, many academician experts had said that the target might be too high when interviewed by the media.

The 30 billion cubic meters of information revealed that the policy layer's production of shale gas is also expected to decline rapidly. The shale gas boom may cool down.

Just two years ago, when the National Energy Administration issued the "Shale Gas Development Plan (2011~2015)", Zhang Yuqing, director of the Oil and Gas Department of the National Energy Administration, said that China's shale gas recoverable resources are 25 trillion cubic meters. The current stage is to achieve an annual output of 6.5 billion cubic meters by 2015 and an annual output of 60 billion to 100 billion cubic meters by 2020.

In the past two years alone, why have the shale gas production targets that have received much attention been “suddenly cut off”?

Looking at a set of data first, in 2012, China's shale gas production was 25 million cubic meters. In 2013, although the output increased several times, it was only 200 million cubic meters. In 2014, the official production target was 1.5 billion cubic meters. These figures are clearly far from the 60 billion.

"I think 30 billion is a very objective number." A shale gas expert from PetroChina told this reporter. Take PetroChina as an example. The production target for 2015 is 2.6 billion cubic meters.

At present, 80% of China's shale gas resources are in the hands of PetroChina, Sinopec, CNOOC and Yanchang Petroleum. These four are also referred to by the industry as “three barrels and half oil”.

The shale gas development has large investment, high cost and long recovery period. According to the data, as of the end of April 2014, China's shale gas development has invested more than 15 billion yuan.

China has not been involved in the shale gas field for a long time. It is still in the preliminary exploration stage. However, at the recent China Energy Summit 2014, Zhao Xianliang, director of the Oil and Gas Resource Strategy Research Center of the Ministry of Land and Resources, pointed out that China’s shale The investment in unconventional oil and gas, such as gas, is far from the United States, Canada and other countries, and it is still under-invested. Several major oil companies have primary responsibility.

According to Zhang Dawei, deputy director of the Oil and Gas Resource Strategy Research Center of the Ministry of Land and Resources, the shale gas production reached 100 billion cubic meters, requiring a total investment of 400 billion to 600 billion yuan.

The industry believes that although “three barrels and a half oil” is not bad, high input and low returns make it difficult for large-scale industrial production of shale gas in the short term, and market prices are difficult to compete with conventional natural gas, resulting in a rapid increase in production.

On the other hand, the current problem of too low shale gas recovery in China is technically difficult to solve. The recovery rate of shale gas is generally only 5% to 20%, while the recovery rate of conventional natural gas is above 60%.

The reporter was informed that in the 2020 goal of shale gas production of 30 billion cubic meters, the task for Sinopec is big.

In recent years, PetroChina and Sinopec have been in a state of contending for shale gas development. PetroChina, which has been involved in this field in 2006, was later listed by Sinopec. At present, CNPC focuses on two national-level shale gas development demonstration zones—Sichuan Weiyuan Changning and Yunnan Zhaotong; and Sinopec's shale gas development is concentrated in Fuling, Chongqing.

In March this year, Sinopec announced that the Fuling shale gas field has entered the stage of large-scale and commercial development ahead of schedule. At the end of 2014, the Fuling shale gas field will have a production capacity of 1.8 billion cubic meters, and will have a capacity of 5 billion cubic meters by the end of 2015.

In addition to the two major oil companies, "the second batch of shale gas winning enterprises have not made much progress now," said the above-mentioned CNPC experts.

Since the third round of bidding that began rumors in the second half of 2013, there has been no exact news. According to industry insiders, the third round of exploration rights bidding has the possibility of delegating to the provinces.

However, the above-mentioned Chinese oil experts told reporters that there is actually no good block. Even if the bidding is carried out, there will be no major progress in the past few years, because exploration takes a long time and a high cost.

Earlier media reports said that the former Ministry of Land and Resources will take out the 200,000 square kilometers block in Sichuan Province into the third round of bidding blocks, accounting for 41% of the province's total area of ​​485,000 square kilometers, but due to Sichuan Province The government and the "two barrels of oil" opposition finally ended up.

Due to the difficulty in shale gas mining in China, the industry generally believes that the development cost of shale gas in China is four times that of the United States.

Chen Weidong, chief researcher of CNOOC, said earlier that the three steps in the development of shale gas in the United States are: cost reduction, scale up, and sustainable development.

"Price is the main factor in energy structure adjustment, and scale is the basis for energy structure adjustment." Deng Yusong, deputy director of the Market Economy Research Institute of the Development Research Center of the State Council, said that China's shale gas should see results at least until 2018.

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