Under a new development plan released today, China forecasts production growth of natural gas from its shale deposits of around 230 billion cubic feet by 2015, up from zero today. The country also expects to raise production to at least 10 times that amount by 2020.
The country has just begun exploring for shale gas, but the potential is definitely present. Last year, the US Geological Survey estimated China’s total shale gas resource at 1,275 trillion cubic feet, about 50% greater than the estimated US resource (our coverage here). Royal Dutch Shell plc (NYSE: RDS-A) and its partner, Petrochina Co. Ltd. (NYSE: PTR) announced last December that they had struck gas in two vertical wells (our coverage here). Chevron Corp. (NYSE: CVX), Total SA (NYSE: TOT), and BP plc (NYSE: BP) have also been discussing possible exploration ventures in China.
China’s goal is to replace a significant portion of its coal-fired electricity generation with cleaner gas-fired generation. The country has also indicated that it will welcome foreign expertise to help it get its shale development up and running.