According to a recent report, the delays that China is facing in its attempts to unlock its shale reserves may drive demand for LNG imports. Recent analysis claims that China’s shale gas production will rise to 23 billion m3 by 2020 (29% of the Chinese government’s target of 80 billion ft3), this is well under the average estimates provided by many analysts.
The shortfall is largely blamed on complex geology, which makes accessing and successfully recovery shale reserves significantly more complicated. The problem is so profound that there has yet to be a single example of commercial production of Chinese shale gas. In the US, for example, where geologies are less complex, the shale gas and oil industry is undergoing rapid expansion, which has led to the US becoming the world’s leading natural gas producer.
Thomas Grieder, an analyst at IHS Energy said that “China may well emerge as a new shale-gas frontier, but production isn’t likely to be in very significant volumes compared with conventional gas supply for a decade at least … the country will continue to rely on LNG imports.”
Though it may be some time before Chinese shale reserves are accessed on any meaningful scale, the estimated total recoverable shale gas is a staggering 1275 trillion ft3, roughly triple the entire reserves of the US.
Another aspect that many feel is hindering Chinese shale progress, is the stipulation that foreign companies are barred from acting independently in acreage auctions, Chinese law insists that outside companies must operate with Chinese partners. This additional complication is believed to be a hindrance to investment.
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/16022012/chinese_shale_delays_may_boost_lng_production/