Success of unconventional gas depends on incentives, foreign tech - expert
Shanghai. August 2. INTERFAX-CHINA - China is capable of producing 100 billion cubic meters (bcm) of unconventional gas annually by 2020 if it encourages use of foreign technology and introduces incentives for domestic energy companies, state media reported Aug. 1.
Foreign technology is crucial to developing China's unconventional natural gas industry since domestic energy companies lack drilling capabilities, according to a China National Radio report, citing Jia Chengzao, Chairman of the China Petroleum Society.
"At the same time, our government needs to grant more incentives to domestic companies," Jia said at the Society of Exploration Geophysicists conference in Beijing. "Only under such conditions can China achieve production targets of 100 bcm by 2020 - equivalent to 30 percent of China's total gas output."
China is in the early stages of developing its unconventional natural gas reserves, with production presently accounting for just 12.50 percent of annual natural gas output, Sun Zandong, president of the China University of Petroleum, said at the same conference.
"If we want to expand unconventional gas production throughout China, domestic companies must be able to conduct exploration themselves," Sun said.
The central government is considering whether to allow more domestic companies to bid for shale gas exploration rights, and if foreign participation in shale gas exploration should be expanded, Interfax previously reported.
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