Re the June 25, 2012, article below, “Shale Gas Resources
Drop, China Next?”, the U.S. Energy Information Administration has lowered its
estimate of China’s shale gas resources by 12.5 percent. The EIA June 2013 Technically Recoverable Shale Oil and Shale Gas Resources, a
revision of its April 2011 study, lowered China’s shale gas TRR to 1,115
trillion cubic feet (TCF~31.6 trillion cubic metres) from 1275 Tcf in 2011. The EIA analysis, performed by Advanced
Resources International, Inc., summed new estimates for the Sichuan (626 Tcf),
Tarim (216 Tcf), Junggar (36 Tcf) and Songliao (16 Tcf) basins with 222 Tcf from
smaller, more structurally complex Yangtze Platform, Jianghan and Subei
basins.
EIA based its revision on “…better information regarding the
total organic content and geologic complexity … of the shale gas resource in
the Qiongzhusi formation in the Sichuan Basin and Lower Cambrian shales in the
Tarim Basin. The Qiongzhusi Shale gas resource estimate was reduced from 349
trillion cubic feet in the 2011 report to 125 trillion cubic feet in this
report. The lower estimate resulted from the prospective area being reduced
from 56,875 square miles to 6,500 square miles. Similarly, the prospective area
of the Lower Cambrian shales was reduced from 53,560 square miles in 2011 to
6,520 square miles in the current report, resulting in a reduction in the shale
gas estimate from 359 trillion cubic feet in 2011 to 44 trillion cubic feet
now.”
While noting the country-wide shale gas development problems
in China of complex geology, limited technological and equipment services,
water resource constraints and lack of infrastructure, the EIA observed that
the Sichuan basin—which holds more than half of China’s shale gas TRR—has
existing pipelines, abundant surface water supplies and close proximity to
major municipal markets. In June,
China National Petroleum Corp. (CNPC) commenced construction of the country’s
first dedicated shale gas pipeline.
The 92.8 kilometre (57.7 miles) conduit will link Changning block gas
wells to an existing gas pipeline that connects with neighboring Yunnan
Province. The new pipe’s designed
capacity is 4.5 mmcm (159 mmcf) per day.
EIA’s estimate of China’s technically recoverable shale gas
resources still exceeds those of China’s Ministry of Land Resources, noted in
the article below. Further, the
EIA/ARI report emphasizes that future exploration and development drilling in
China will affect shale gas TRR estimates, and could increase these
appraisals. So while China’s early
targets for shale gas production of 6.5 bcm in 2015 and 60-100 bcm in 2020
appear unrealistic, China continues to possess by far the world’s largest shale
gas resources. This resource
endowment, combined with recent increases in producer prices for natural gas
(see July 16 article below) and a government commitment to reduce the growth of
emissions from energy consumption, holds hope for the long-term future of shale
gas development in China.
