China’s state-owned oil and gas major and top refiner Sinopec is ramping up exploration in the shale formations of the Sichuan basin with a view to increasing the country’s shale gas production by a third over the next ten years.
Currently, China’s shale gas total is below government targets, Reuters noted in a report on the news, adding shale gas represents only a tenth of China’s total natural gas production. Beijing has a shale gas output target of 80 to 100 billion cu m by 2030. This has prompted Sinopec and other state-owned entities to drill deeper into the shale formations, at depths of up to 5,000 meters.
Sinopec alone booked proven natural gas reserves of 236 billion cu m from a project called Ziyang Dongfeng last month, at a depth of 4,500 meters. Reuters noted this was a breakthrough in ultradeep shale drilling. Billions are being poured into this new exploration push, with industry executives expecting that production from the new deposits would scale in two to three years. Sinopec, however, has pointed out that the task would be a challenge. Drilling at such depths goes with problems such as uncertainty about the reservoir characteristics, complex accumulation mechanisms, difficulty in drilling due to the thickness of the formation, as well as the ever-present ultradeep drilling challenges of heat and pressure.
Despite these challenges, shale exploration is an important part of China’s push to boost its domestic oil and gas production in a bid to reduce its significant exposure to imported energy commodities. The country is the world’s biggest oil importer and a top-three natural gas importer. Despite a rather diversified base of suppliers in both commodities, China has made it a priority to increase its degree of self-reliance in hydrocarbon energy, alongside its alternative energy growth.