China Estimates Exploitable Shale-Gas Reserves at 25.08 TCM

China has 25.08 trillion cubic meters (886 trillion cubic feet) of exploitable onshore shale- gas reserves, according to the nation’s land ministry.

The resources are part of an estimated 134.42 trillion cubic meters of total reserves of the gas in the country, the Ministry of Land and Resources said in a statement on its website today, citing a nationwide survey. Shale gas has already been discovered in 880,000 square kilometers (340,000 square miles) of exploration blocks that contain 15.95 trillion cubic meters of the fuel that can be extracted, it said.

China, which has yet to produce shale gas commercially, aims to triple the use of natural gas by 2020 to 10 percent of energy consumption to curb pollution. It plans shale-gas output of 6.5 billion cubic meters a year by 2015 rising to 80 billion by 2020, Zhang Dawei, deputy head of the ministry’s Strategic Research Center, said in October, citing a draft of a national program.

“China is rich in shale-gas resources, which are suitable for scaled development,” Yu Haifeng, deputy director of the ministry’s geological exploration department said in the statement. “But the geological conditions are complex and our exploration technology, which lags behind advanced countries, requires innovation.”

Auction Plans

The country aims to start development of shale gas resources by 2015 and accelerate its extraction by 2020, according to today’s statement.

China will hold one or two auctions of shale-gas blocks this year, it said, without giving details. China Petroleum & Chemical Corp. (600028), the nation’s second-largest oil company, and Henan Provincial Coal Seam Gas Development and Utilization Co. won the rights to explore two areas in the country’s first shale-gas auction in June.

China’s shale formations may hold 1,275 trillion cubic feet of technically-recoverable gas, or 12 times the country’s conventional gas deposits, the U.S. Energy Information Administration said in April 2011.

To contact the reporter on this story: Winnie Zhu in Shanghai at wzhu4@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net

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