China to Set Shale-Gas Output Targets, Securities Journal Says

China aims to produce 6.5 billion cubic meters of shale gas annually by 2015 under a government plan to be released soon, the China Securities Journal reported, citing an official at state-owned China National Petroleum Corp.

The nation will target 80 billion cubic meters of annual shale-gas output by 2020 under the plan drafted by the National Energy Administration, the newspaper said, citing Song Xiaodan, a deputy chief economist at CNPC’s planning department.

China, which currently doesn’t produce any shale gas commercially, aims to triple the use of natural gas to about 10 percent of energy demand by 2020 to rely less on more polluting coal and oil. The country may have 1,275 trillion cubic feet (36 trillion cubic meters) of shale gas, 48 percent more than the U.S., the Washington-based Energy Information Administration said in a report in April.

China Petroleum & Chemical Corp. (386) and Henan Provincial Coal Seam Gas Development and Utilization Co. won exploration rights in the country’s first auction of shale-gas blocks, the Ministry of Land and Resources said in July. A second auction will be held in the fourth quarter, Zhang Dawei, deputy director of oil and gas strategy research at the land ministry, said yesterday.

--Jing Yang. Editors: Ryan Woo, Paul Gordon.

To contact the Bloomberg staff on this story: Jing Yang in Shanghai at jyang251@bloomberg.net

To contact the editor responsible for this story: Paul Gordon at pgordon6@bloomberg.net

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