Radio Free Asia: China Faces Choices on Shale Gas Goals

As China struggles to meet its goals for shale gas development, there are signs that the government will face pressure to subsidize the costs, perhaps for years.

The industry came close to meeting the government's target for extracting natural gas from shale rock formations last year, producing 1.3 billion cubic meters (bcm) of the new fuel compared with a goal of 1.5 bcm (52.9 billion cubic feet).

But 1.14 bcm, or nearly 90 percent of the gas, came from a single field, the Fuling block in southwestern Chongqing municipality, under development by state-owned China Petroleum & Chemical Corp. (Sinopec).

Some 200 million cubic meters was produced from 40 wells drilled by state-owned China National Petroleum Corp. (CNPC), the official English-language China Daily reported.

Shale is just a small fraction of China's gas output, although its potential could make it the fastest-growing segment of the industry.

Last year, China produced 132.9 bcm of natural gas, including 4.9 bcm of unconventional gas, consisting of coal- bed methane (CBM) and shale, the official Xinhua news agency reported, citing the Ministry of Land and Resources (MLR). MORE