Chinese Guizhou Province to Tender Shale Gas License
Chinese Guizhou province will tender a shale gas license on August 18 in its first attempt to explore the unconventional hydrocarbon potential of the province, the ministry of land and resources, which has approved the process, said July 6.
The Zhengyan shale gas exploration area is spread over 695 kilometres2. The license will be valid for three years, during which the operator has to complete at least 30% of committed work. However, a two-year extension can be offered if the entity has invested yuan 50,000 per km2 ($7,403 per km2 ). The bidder must have a minimum net asset of yuan 300mn and should be registered in China.
The ministry of land and resources estimates that the area holds 10bn metres3 of shale gas reserves.
With urban pollution a major issue, Chinese authorities have encouraged greater exploration of cleaner fuels like natural gas. Although, China has vast reserves of shale gas, actual production has been below government's expectations. However, output has recently picked up. China produced a record amount of shale gas in 2016. The country produced close to 7.9bn m³ of shale gas last year, up a little over 76% year on year.
Shardul Sharma