China gearing up for shale gas auction

May 18, 2012 at 6:34 AM

BEIJING, May 18 (UPI) -- A second round of auctions for shale natural gas developers is a sign China is serious about developing the emerging sector, an adviser said.

China aims to have a shale auction this year. Chinese companies interested in taking part need to have at least $47 million worth of registered capital before the end of the month to qualify.

Zhang Jinchuan, a geology professor at the China University of Geosciences in Beijing and government adviser, told Bloomberg News the auction was a positive sign for the country.

"It's obvious the second round of shale gas auctions is getting near and it's a good sign for the development of China's shale gas industry," he said.

China hasn't produced any shale gas on a commercial scale because of complex geology and a lack of domestic experience. Foreign companies are barred from taking part in the auction directly.

China has an estimated 800 trillion cubic feet in shale natural gas reserves, the most in the world. Beijing aims to produce as much as 230 billion cubic feet of shale gas per year by 2015.

There were 50 shale natural gas wells drilled in China last year.

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