China’s shale gas production will likely reach 17 billion cubic meters (bcm) in 2020, nearly double the 2017 level, as local oil companies make big progress with drilling technology and cost-cutting, consultancy Wood Mackenzie said in a note on Tuesday.
Nearly 700 new wells will come onstream between 2018 and 2020 at three key projects – Sinopec’s Fuling, and PetroChina’s Changning-Weiyuan and Zhaotong – all located in the country’s southwest, and at a total cost of $5.5 billion, Woodmac estimated.
The forecast 17 billion cubic meters of output in 2020 falls short of Beijing’s goal of 30 billion cubic meters, which was slashed by more than half from the government’s initial target set in 2012.
That means the world’s No.3 gas user will need to keep its imports of liquefied natural gas (LNG) at elevated levels. Woodmac has separately forecast China’s LNG imports will increase by a quarter to nearly 49 million tonnes this year, from record highs in 2017.
The USA produces about 13.5 trillion cubic feet of shale gas or about 382 billion cubic meters. The US production of shale gas was about 42 times more than China’s production last year. The US produces about 9 times more shale gas than Canada. By 2040, Canada and the USA are projected to double 2015 production of shale gas. China is expected to reach about half the USA 2015 production or one-quarter of the US production in 2040.
China produced 9 billion cubic meters of shale gas last year, or 6 percent of its total gas output.
“China is eager to materialize its shale gas potential to fuel its massive gasification initiative and support rising demand growth,” said Wood Mackenzie’s Tingyun Yang.
Nextbigfuture notes that with all of the massive investment and effort to develop shale gas that it is clear fossil fuels will not be phased out for many decades.