POWER January 2014 - 41

POWER IN CHINA
China's Shale Gas Development
Outlook and Challenges
Developing and using shale gas could alleviate fossil fuel shortfalls in China,
enhance that nation's energy security, and contribute to economic and
social development. Though the government has plans to utilize its buried
shale resources, significant barriers to that plan remain.
Zeng Ming, Liu Ximei, and Li Yulong
T
hanks to sustained and rapid development
of China's economy, demand for
natural gas has been increasing. From
2000 to 2010, China's demand for natural
gas increased from 24.7 billion cubic meters
(bcm) to 107.2 bcm; the average growth rate
was about 16%. Furthermore, by 2009, natural
gas demand exceeded supply in the Chinese
market. China's conventional natural gas production
exceeded 100 bcm for the first time
and reached 102 bcm in 2011, but the growth
rate of yields was only 8.45%-lower than the
average of 13.07% in the past decade.
Additionally, China's dependence upon
traditional energy imports is increasing yearly.
Dependence upon foreign oil reached 53.8%
in 2011, and net imports of coal were about
146 million tons in 2010, with year-on-year
growth of more than 41%. Natural gas imports
have been steadily increasing (Figure 1) as
Chinese natural gas demand has been growing
faster than that of coal and petroleum.
China's high degree of dependence upon
traditional energy imports is becoming a serious
threat to the country's energy security.
Oil can be purchased from the international
market; however, natural gas imports are
1. Chinese natural gas imports
are increasing. Source: General Administration
of Customs of the People's Republic of
China
25%
20%
15%
10%
5%
0%
23%
Unit
Oil and Gas Center of Ministry of Land and
Resources
14%
8%
5% 5%
2%
2006
2007 2008 2009 2010 2011
January 2014 | POWER
www.powermag.com
Energy Information Administration (EIA)
Research Institute of Petroleum Exploration
and Development
Langfang Branch of PetroChina Research
Institute
China University of Geosciences (Beijing)
limited by the fact that regional distribution
is mainly by pipelines, which are limited in
adjacent countries.
It is predicted that China's natural gas
consumption will maintain an annual growth
rate of 25% in the next five years and that
demand will reach 170 bcm to 210 bcm in
2015. However, it is also estimated that natural
gas production will be only 140 bcm in
2015, with a growth rate of only 15%, which
is far below that of consumption increases.
The gap between supply and demand for natural
gas in China will continue to expand in
2015, reaching 50 bcm.
In light of current environmental pressure,
the high degree of dependence on foreign oil
and gas, prominent nuclear safety concerns,
and renewable energy grid integration issues
(see " A Plan for Optimizing Technologies to
Support Variable Renewable Generation in
China " in the December 2013 issue of POWER),
it is of great significance for China's energy
security to accelerate the development
and utilization of shale gas.
China's Shale Gas Resource
Potential
" Evaluating shale gas resource potential and
defining favorable exploration targets in key
areas, " as enacted by the Ministry of Land
and Resources, finds that the resource potential
of China's land shale gas is 134.42 trillion
cubic meters (tcm) and the recoverable
resource potential is 25.08 tcm (excluding
Qinghai-Tibet district). The area evaluated
where shale gas has been found is about
88 square kilometers (km), with geological
resources of 93.01 tcm and recoverable
resources of 15.95 tcm. The U.S. Energy
Information Administration (EIA) has released
a report saying that China's shale gas
resource is as high as 1.275 quadrillion cubic
feet (36 tcm), ranking first in the world
(Table 1). These numbers differ from others
in Table 1, but all are estimates and all suggest
abundant shale gas resources.
China has abundant, widely distributed
organic shale. Offshore, marine rocks have
been developed in South China, North China,
and the Tarim Basin in Xinjiang. The
resource potential of continental rocks with
geological conditions of shale gas reservoirs
is large. Continental shale gas is mainly
found in North China, the Junggar Basin, the
Turpan-Hami Basin, Ordos Basin, Bohai Bay
Basin, and Songliao Basin. The three marine
shale basins are southern Paleozoic marine
shale, North China lower Paleozoic shale,
and Tarim Basin Cambrian/Ordovician Paleozoic
shale.
Table 1. Estimates of China's shale gas resource.
Estimated resources
(trillion cubic meters) Evaluation year
25.08
36.1
10-20
11.4
26
2012
2011
2009
2009
2008
Remarks
Main basin and
region
Main basin
Main basin
Emphatic basin
Emphatic basin
and region
41
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