China's Shale Gas Reserves Jump Fivefold as Output Lags Target

  • Recoverable shale gas reserves up to 130 billion cubic meters
  • Conventional gas reserves at 5.19 trillion cubic meters

China boosted its recoverable shale gas reserves more than fivefold last year as the country missed its production target for the fuel.

Recoverable shale gas reserves, or those that can be commercially produced, rose 109 billion cubic meters last year, said Yu Haifeng, director at the department of mineral resources in the Ministry of Land and Resources, according to a transcript of a briefing Wednesday. That increases the country’s total shale gas reserves to 130 billion cubic meters.

“Oil and gas reserves maintained a high level of growth, with shale gas reserves rose significantly,” Yu said. “The ministry spared no efforts in searching for new resources in 2015” as it followed guidance laid out by the State Council, the country’s highest policy making body, he said.

Premier Li Keqiang reiterated last month China’s goal of boosting production and use of natural gas as a substitute for coal. While conventional gas production is rising, China missed its annual shale gas target of 6.5 billion cubic meters last year and earlier cut its 2020 production goal to about a third of its original estimate, citing difficult geology, lack of infrastructure and limited exploration rights. China produced 4.47 billion cubic meters of natural gas from shale in 2015, a more than threefold increase from the year before, the ministry said Wednesday.

Shale Challenge

Exploiting the country’s shale gas resources have proved challenging for international oil companies including Royal Dutch Shell Plc, which last week said it was no longer pursuing it’s China shale venture. BP Plc the same week signed its first shale-gas production deal in the country, joining the nation’s biggest oil company, China National Petroleum Corp., to target the same areas on the Sichuan basin that ConocoPhillips earlier walked away from.

The country is aiming to produce 200 million metric tons of crude oil and 144 billion cubic meters of natural gas this year, the National Energy Administration said on Friday.

More on oil and gas reserves from the ministry:

  • China added 1.12 billion tons of crude reserves in 2015. Of that, 217 million tons are recoverable, putting total recoverable reserves are 3.496 billion tons. The country produced about 215 million tons in 2015.
  • Total recoverable conventional natural gas reserves were 5.194 trillion cubic meters. Output -- excluding unconventional sources such as shale and coal-bed methane --dropped 0.4 percent to 124.5 billion cubic meters.
  • China’s added 2.63 billion cubic meters of coal-bed methane reserves, of which 1.32 billion cubic meters are recoverable. Total recoverable coal-bed methane reserves were 306.3 billion cubic meters. China’s coal-bed methane output rose 25 percent to 4.4 billion cubic meters last year.