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Shale Gas Exploration in North China Marks Breakthrough

| Feb 16, 2015 06:16 AM EST

Sichuan is considered to be the most developed province in Southwest China and has the largest GDP within the country.

A breakthrough six-meter-high industrial gas flow was revealed in a shale gas well in the Inner Mongolia Autonomous Region, pushing China's reserves being invested in for exploration at 130 billion cubic meters.

The coal-rich well, located in Ordos City, is 3,568 meters deep with a maximum daily gas flow of 50,000 cubic meters and a daily production capacity of 19,500 cubic meters. Over 87 percent of the shale gas found at the well is methane, making it a potential high-yield well.

Meanwhile, the Fuling field in the municipality of Chongqing in southwest China is groomed to become the country's first shale gas field.

Beginning 2017, the field's annual production capacity is projected at 10 billion cubic meters.

Although progress is relatively slow as shales in China's basins are deep and complex compared to those in the United States and hampered by water scarcity, the government is putting its weight behind the industry's development efforts.

China's state-owned giants have already invested close to an estimated $2.5 billion and drilled 322 wells in the country's domestic shale exploration and development activity.

The number of wells in the country has breached the 400 mark, mostly through efforts put in by PetroChina (China National Petroleum Corp.) and Sinopec (China Petroleum & Chemical Corp.).

The two firms led the formation of the Chongqing Shale Gas Exploration and Development Co. Ltd. PetroChina has a 40-percent share in the said company, State Development and Investment Corp. holds 39 percent, while Sinochem has 20 percent.

The new entity, with a total registered capital of 6 billion yuan ($974.96 million), has earmarked up to $4.2 billion for investment in five blocks with a total area of 15,600 square kilometers.

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