China Shale Gas Sector Analysis

 Published On: Jan, 2014 |    No of Pages: 70 |  Published By: KuicK Research | Format: PDF
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China is basking in the glory of its recent world’s largest shale finds. With almost 25% more reserves than the United States, China is dreaming about an even bigger energy revolution than the one seen in America. If estimates are to be believed then this 1,275 Trillion Cubic Feet of shale gas reserves found in China will last for about 300 years at the present rate of production and consumption. Since Chinese shale gas scenario is in its early years, the future is large and as of now looks promising. The practical production currently is zero, with a couple of experimental wells producing only 10,000 meters of gas per day but nothing substantial.

China’s shale gas reserves are spread over almost all of the country with an estimated amount of about 1275 Trillion Cubic Feet. The exploration of shale gas in China is still in its infancy. Exploration of shale gas is picking speed with companies; Shell has recently announced that the exploratory results in the Sichuan basin are satisfying.

China’s enormous shale gas resource has been mainly found in the Sichuan or South China and Tarim basins, but a lot is also scattered all over the region. The commercial viability of these reserves is a major concern. Nonetheless, they will be explored at a later stage to determine the amount of hydrocarbons present. For convenience, the reserves can be divided into four regions, North China, South China, Northwestern and Northeastern China. In these four regions, shale deposits have been found in eight basins viz. Songliao basin, Bohaiwan bay, NorthChina, Sichuan or the South China basin, Ordos basin, Tuha Basin, Zhungaer basin and Tarim Basin. Out of these, North China, Sichuan (South China) and Tarim basins are Marine Deposits and the rest five are Continental Deposits.

The Chinese Five Year Plan of 2011 to 2015 for the development of Shale gas in the country has set a target of 6.5 Billion Cubic Meters by the end of 2015. The plan includes not just exploration and production, but also transportation and infrastructure, which China is currently struggling with. The pipeline network is insufficient to transport such huge quantities of gas and the Chinese terrain makes it even more difficult to lay any pipelines. This will require huge investment in the future. Another problem is the lack of water supply. Fracking, the shale gas extraction technology, requires large amount of water, which again means more money needs to be pumped in to ensure uninterrupted supply of water to the wells.

“China Shale Gas Sector Analysis” research gives comprehensive insight on following aspects related to shale gas industry in China:

• Current Industry Overview
• Shale Gas Reserves
• Regulatory & Policy Framework
• Shale Gas Blocks Auction Process & Result
• Shale Gas Development Plan (2011-2015)
• Shale Gas Investments
• China Shale Gas Industry Future Outlook

Companies Covered

Sinopec Group, China National Offshore Oil Corporation, China National Petroleum Corporation, Royal Dutch Shell

1. China Shale Gas Sector Overview
1.1 Sector Overview
1.2 Shale Gas Reserves by Basin & Region
1.3 Chinese v/s U.S Shale Gas Reserves

2. Investments in Development of Shale Gas Blocks
2.1 Chinese Companies Foreign Partnerships for Technical Know How
2.2 Investment by Government & Local Companies
2.3 Subsidy for Shale Gas Exploration

3. Shale Gas Blocks Auction Process Analysis
3.1 First Auction (2011)
3.2 Shale Blocks Identified for Second Auction (2012)
3.3 Second Shale Gas Block Auction Results (2013)

4. Shale Gas Policy Analysis
4.1 First Shale Gas Policy Announce by National Energy Administration
4.2 Bidding the Shale Gas Blocks
4.3 Shale Gas Declared as Independent Resource
4.4 Liberalized Pricing Mechanism
4.5 Shale Gas Development Plan (2011-2015)

5. China Shale Gas Industry Future Outlook
5.1 Demand and Supply Scenario
5.2 Increased Foreign Participation
5.3 Technical Advancement
5.4 Shale Gas Exploration Opportunities & Challenges

6. Shale Gas Sector - PEST Analysis
6.1 Political Factors
6.2 Economic Factors
6.3 Challenges for Shale Gas Sector
6.4 Technological factors

7. Shale Gas Exploration Technologies
7.1 Horizontal Drilling
7.2 Hydraulic Fracturing
7.3 Measurement While Drilling (MWD) Tools and Logging While Drilling (LWD) Tools
7.4 Pad Drilling

8. Competitive Landscape
8.1 Sinopec Group
8.2 China National Offshore Oil Corporation
8.3 China National Petroleum Corporation
8.4 Royal Dutch Shell

List of Figures

Global Shale Gas Reserves

Figure 1-1: Global Technically Recoverable Shale Gas Reserves by Region (Trillion Cubic Feet)
Figure 1-2: Global Technically Recoverable Shale Gas Reserves by Region (%)

China Shale Gas Reserves, Production & Investments

Figure 1-3: China Shale Gas Basins
Figure 1-4: China Share in Global Technically Recoverable Shale Reserves
Figure 1-5: China Ranking in Global Technically Shale Gas Reserves (Trillion Cubic Feet)
Figure 1-6: China Share in Asia Technically Recoverable Shale Gas Reserves
Figure 1-7: China Shale Gas Reserves by Region
Figure 1-8: China Shale Gas Production (Million Cubic Meters), 2012 & 2013
Figure 1-9: China & US Shale Well Depth Comparison
Figure 1-10: China & US Shale Well Drilling Cost Comparison
Figure 2-1: China Investment in U.S Shale Gas by Basins
Figure 2-2: China Investment in U.S Shale Gas by Company
Figure 2-3: China Share of Shale Gas Investment in Oil and Gas Exploration Investments
Figure 2-4: China Shale Gas Investments by Government & Domestic Oil Companies (Million Yuan)
Figure 3-1: China Shale Gas Production Target (Billion Cubic Meters), 2015 & 2020

China Shale Gas Blocks Auction

Figure 3-2: Shale Gas Blocks Offered During First & Second Round of Auction
Figure 3-3: Shale Gas Blocks Bidders During First & Second Round of Auction
Figure 3-4: Shale Gas Blocks Bids Submitted During First & Second Round of Auction

China Natural Gas Production & Consumption

Figure 5-1: China Natural Gas Consumption (Billion Cubic Meters), 2011-2015
Figure 5-2: China Natural Gas Production (Billion Cubic Meters), 2010-2013
Figure 5-3: China Natural Gas Production & Import (Billion Cubic Meters), 2013
Figure 5-4: Share of Import in China Natural Gas Consumption, 2012 & 2013
Figure 5-5: China Natural Gas Production & Import (Billion Cubic Meters), 2015
Figure 5-6: Share of Import in China Natural Gas Consumption, 2015
Figure 6-1: Share of Natural Gas in Energy Mix, 2012 & 2015

List of Tables

Table 3-1: Shale Blocks Identified for Second Auction
Table 3-2: Successful Bidders in Second Shale Block Auction

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