China Completes First Horizontal Shale Gas Drilling in Sichuan

China completed its first horizontal shale gas well, after 11 months of drilling, as the world’s biggest energy consumer seeks to tap its reserves of the cleaner-burning fuel.

The Wei 201-H1 well at the Weiyuan formation in the Sichuan Basin has a 1-kilometer (0.6-mile) horizontal section at a depth of about 3 kilometers, according to China National Petroleum Corp.’s online newsletter today.

Producers face “unique” geological, technical and commercial challenges, according to consultant Wood Mackenzie. China may hold as much as 380 trillion cubic meters of unconventional gas, about 10 times the potential conventional reserves, CNPC said in November.

Chuanqing Drilling Engineering Co., a unit of CNPC, conducted the operation, the newsletter said. Liu Weijiang, Beijing-based spokesman for CNPC, didn’t answer three calls during office hours. Mao Zefeng, Beijing-based spokesman for Hong Kong-listed unit PetroChina Co., also couldn’t be reached in three calls to his office and mobile phone.

No foreign venture partner was mentioned in the report. Chinese oil companies are joining with producers including Royal Dutch Shell Plc (RDSA) and Chevron Corp. (CVX) to tap their expertise in extracting unconventional gas resources.

CNPC is working with Shell to explore Sichuan’s Fushun- Yongchuan shale gas block and with Chevron on the Chuandongbei project, also in Sichuan.

China plans to triple the use of natural gas to about 10 percent of energy consumption by 2020 to help cut reliance on more-polluting oil and coal.

To contact the reporter on this story: Baizhen Chua in Beijing at bchua14@bloomberg.net

To contact the editor responsible for this story: Clyde Russell at crussell7@bloomberg.net

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