Shale gas development in our country is about to experience a \"boom\"”

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Shale gas development in our country is set to experience a surge. Author/Source: Date: 10-09-2016. Clicks: 37. The goal is to reach a shale gas production volume of 30 billion cubic meters by 2020. **The Energy Bureau recently issued the \"Shale Gas Development Plan (2016-2020)\\", which calls for a significant increase in shale gas production, provided that there is adequate policy support and smooth market development; the target is to achieve 30 billion cubic meters of shale gas production by 2020. Experts say that the development of shale gas will effectively drive the growth of related industries such as transportation, steel, materials, equipment, cement, and chemicals, attract investment from both domestic and foreign sources, and promote the sustainable development of the local economy and the national economy as a whole. 　　“During the 12th Five-Year Plan period, significant progress was made in the exploration and development of shale gas in China, which made the country the first outside North America to achieve large-scale commercial exploitation thereof, laying a solid foundation for its further industrial development during the 13th Five-Year Plan period. **A responsible official from the Energy Bureau said that during the 13th Five-Year Plan period, the new normal of economic development will drive continuous optimization and adjustment of the energy structure. The demand for clean energy sources such as natural gas will continue to rise, providing strategic opportunities for the large-scale development of shale gas. 　　As our country strengthens efforts to control air pollution, vigorously promotes a clean and low-carbon development strategy, and actively advances the construction of new urban areas, natural gas will surely play an even greater role in adjusting and optimizing the energy structure. 　　The \"Energy Development Strategy Action Plan (2014–2020)\」issued by the General Office of the State Council specifies that by 2020, natural gas is to account for over 10% of China’s total primary energy consumption; therefore, vigorous development of shale gas is in line with the overall trend of China’s energy development. 　　A rich resource base and a strong industrial foundation provide solid support for the development of shale gas in our country. “During the 12th Five-Year Plan period, breakthroughs were achieved in shale gas development in the southern marine environments of China; large-scale commercial development of shale gas began in the Sichuan Basin, and industrial test flows were obtained from many other favorable areas. The shale gas resources and development potential of the Longmaxi Formation in the southern marine environments were thoroughly verified. At the same time, China has largely mastered the advanced technologies for the efficient development of shale gas in waters shallower than 3,500 meters, which will provide strong technical support for the accelerated development of the shale gas industry during the 13th Five-Year Plan period. 　　It is understood that shale gas wells in our country require large amounts of investment per well, and their production declines rapidly; to maintain stable production in such gas fields, a large number of wells need to be drilled for interwell replacement. Therefore, shale gas development requires large amounts of investment, has a long implementation period, and is subject to many uncertainties, imposing significant financial pressure and investment risks on the companies involved in its development. 　　At the technical level, deep development technologies have not yet been mastered. The development of shale gas resources at depths exceeding 3,500 meters imposes higher demands on horizontal well drilling and completion technologies, as well as on techniques and equipment for enhancing production. Lack of competition in exploration and development is another major challenge. In areas favorable for shale gas development, the mining rights often overlap with those for conventional oil and gas reserves. The mechanisms for withdrawing such conventional oil and gas mining rights are not well-developed, which makes it difficult to take advantage of the unique characteristics of shale gas as a distinct type of resource. 　　As the prices of traditional fossil fuels such as oil and coal fall, natural gas loses its competitiveness, leading to a significant slowdown in its consumption growth. Meanwhile, domestic natural gas production is growing steadily, and a series of long-term natural gas import agreements have been signed with Russia, Central Asia, and Myanmar regarding liquefied natural gas (LNG), which will significantly enhance the country’s natural gas supply capacity in the future. Experts say that, given the current energy consumption pattern, natural gas supply will be generally sufficient during the 13th Five-Year Plan period. 　　In the long term, the development of shale gas is of great significance for promoting scientific and technological progress in our country, driving economic development, optimizing the energy structure, and ensuring energy security. To this end, the Plan outlines four key tasks for the future development of shale gas: advancing scientific and technological research. Keeping up with the new trends in the shale gas technology revolution, we strive to overcome the key technical challenges in exploration and development, such as shale gas reservoir evaluation, horizontal well drilling and completion, production enhancement, and gas reservoir engineering, in order to accelerate the upgrading of existing engineering technologies. 　　Arrange exploration and development in a hierarchical manner. Exploration and development of shale gas fields across the country are advanced in three different ways: focused production, breakthroughs in evaluation, and potential research. 　　Strengthen the development of **-level shale gas demonstration areas. “During the 13th Five-Year Plan period, further efforts were made to strengthen the development of the four **-level shale gas demonstration areas in Changning-Weiyuan, Fuling, Zhaotong, and Yan’an. Through experimental demonstrations, effective shale gas development technologies, efficient management models, as well as appropriate institutional frameworks were improved and promoted. 　　Improve infrastructure and markets. Based on the development of shale gas production capacity as well as the construction and planning of the national gas pipeline network, support is provided for integrating shale gas into the pipeline network or for its utilization in nearby areas. Various types of investors are encouraged to enter the shale gas sales market, gradually giving rise to a market structure in which shale gas extraction companies, sales companies, and urban gas supply companies coexist.