Guizhou gets approval for experimental shale gas zone – Natural Gas Daily – Interfax Global Energy

Guizhou gets approval for experimental shale gas zone

By Li Xin

Posted 12 August 2014 10:23 GMT

Guizhou, one of China’s poorest provinces, has received approval to establish a comprehensive experimental zone for shale gas exploration from the Ministry of Land and Resources (MLR).

Construction of the zone in north Guizhou will last from 2014-2020 and will explore the possibility of building 1 billion cubic metres of annual production capacity, the provincial government said in an announcement.

The zone is estimated to contain 3.88 trillion cubic metres of shale gas in place across an area the size of Taiwan. It will stretch from the northern border of Guizhou to the cities of Jinsha, Zunyi, Meitan, Sinan and Yinjiang.

The aim is to conduct geological theory studies and prove up resources in the zone as soon as possible, according to the announcement. More importantly, the Guizhou government plans to form a comprehensive exploration system for various mineral resources – including shale gas, CBM, and conventional oil and gas – with a mix of public and private ownership.

The MLR will help coordinate the development sequence and protect the legal rights of resource owners, the provincial government said. The ministry will also help regulate water use during shale gas development.

Shale gas was classified as an independent mineral resource at the end of 2011 – a move that permitted entities beyond the big three NOCs to develop it, but also caused confusion because of overlapping mineral rights.

Shale gas is frequently discovered alongside uranium and tight gas, Bao Shujing from the MLR’s China Geological Survey (CGS) told Interfax. He did not disclose how much shale gas overlaps with other minerals.

Guizhou has been active in shale gas exploration and development. The province spent RMB 150 million ($24.37 million) in 2013 to conduct shale gas geological surveys within its borders, according to a CGS research report last year on shale gas exploration and development.

The province completed 26 survey wells last year, with estimated shale gas resources of 13.54 tcm and 1.95 tcm of technically recoverable reserves.

Guizhou has selected 26 favourable exploration and development zones for shale gas and plans to construct two demonstration zones covering a total area of more than 1 million hectares, the research report said. The province plans to build the zones into comprehensive experimental bases in 2016 – including production wells, transmission pipelines and utilisation terminals.

via Guizhou gets approval for experimental shale gas zone – Natural Gas Daily – Interfax Global Energy.