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China plans October shale gas auction

Sept. 12, 2012 at 7:23 AM   |   Comments

BEIJING, Sept. 12 (UPI) -- The Chinese government announced plans to have a shale natural gas auction in October to boost exploration and development.

The Chinese Ministry of Land and Resources announced 20 blocks would go on the auction block Oct. 25. Each entity taking part in the auction can bid for a maximum of two blocks in an area spread over 7,700 square miles in seven provinces, reports Bloomberg News.

The government estimates its recoverable reserve capacity of shale natural gas at more than 800 trillion cubic feet, which would make it the world leader in shale gas.

Beijing, under the terms of a 5-year plan ending in 2015, aims to double the amount of natural gas it uses to about 9 trillion cubic feet per year. An International Energy Agency report described that goal as "ambitious," adding it's twice the level of natural gas consumed in China last year.

Chinese companies and joint ventures controlled by a Chinese partner are eligible for the Oct. 25 auction, the country's second for shale gas.

Bloomberg notes that Beijing aims to produce more than 220 billion cubic feet of shale natural gas under the terms of the 5-year plan. China has yet to produce shale gas commercially.

© 2012 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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