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Forbes
17 hours ago
- Business
- Forbes
Why China Is Pursuing Domestic Shale Gas
Drilling operations for the first shale gas development demonstration project in Guangxi are ... More underway in Hedong Village, Liuzhou City, Guangxi Province, China, on June 2, 2023. (Photo by Costfoto/NurPhoto via Getty Images) China is today the world's leading importer of both oil and natural gas, and, by all accounts, it is not happy with the situation. If its demand for oil might be reduced by a surging electric vehicle industry, the natural gas side has a different possible solution. The U.S. Energy Information Administration published estimates in 2015 that show China with the largest shale gas resources of any nation. The figure of 1,115 trillion cubic feet is nearly twice the 623 tcf assessed for the U.S., where the 'shale revolution' began in the early 2000s, transforming America itself from a major importer to the world's biggest exporter in a single decade. Still, the scale of the resource has been confirmed and yearly production, though small by U.S. standards, has grown impressively by more than 20% each year over the past decade. Chinese leaders hoped for a similar transformation when the country's shale gas program began in the early 2010s. Geology and other factors have held this back, moderating Beijing's expectations. Shale got its start in China when companies like Shell, BP, and Chesapeake Energy helped introduce Western knowledge and technology. Through joint ventures, partnerships, and investments in companies active in U.S. drilling, Chinese national firms like Sinopec and PetroChina gained access to valuable expertise. Between 2010 and 2016, drilling established several gas fields and set the foundation for a larger exploration program. Research on individual shale zones and use of updated technology were key parts of this progress. If China is going to win the global race for economic dominance, then shale gas will likely play a crucial role in domestic energy markets. How Shale Gas Differs In China Vs. The U.S. Geology argues that no two shales are alike. This proved especially true in China's case when compared with such U.S. producers as the Bakken Shale in North Dakota and the Wolfcamp shales of the Permian Basin. The highest quality gas shales, found in the Sichuan Basin in the southern part of the country, are thinner, older, deeper, and more highly faulted and fractured. Wells therefore take more time and are more expensive to drill. The technologies used in the hydraulic fracturing process ('fracking') sometimes need to be modified. In some of China's geologic basins located in dry areas, moreover, there are water supply challenges due to the large volumes needed for fracking. Even when everything goes well and there are no 'surprises,' the total amount of gas recovered over time is less than for the average U.S. well. Such comparisons, though, aren't really fair or helpful, given the differences just noted. Moreover, it can't be denied that Chinese companies are still new to the business of drilling the more complex and demanding wells in the Sichuan Basin. Sinopec and PetroChina, the main companies involved in shale development, have taken a measured approach in the Sichuan and other basins as well. Technical reports indicate that around 3,000 shale gas wells were drilled between 2012 and 2022, an order of magnitude less than the dozens of U.S. companies who pioneered the first gas shale play, the Barnett, during its initial five years, 2000-2005. The Future of Shale Gas In China Beijing's plans are for shale gas production to grow from around 0.9 tcf in 2024 to as much as 3.5 tcf by 2040. That is far from making China an exporter, given that it consumed 15 tcf in 2024 and is predicted to increase this figure by 50% or more over the next decade-and-a-half. Yet the growth in shale gas has been more rapid than planned or expected. It now seems possible, given large new discoveries, that it could play a key role in reducing China's import burden going forward. Energy security is therefore a major reason why the government wants to continue expanding the shale gas program. Oil and gas are still strategic resources in today's world, and any powerful state deeply dependent on others for their supply will view this as a national security concern. A second reason for Beijing's commitment has to do with climate change: China's coal use and carbon emissions are both greater than those of North America and the European Union combined. In a manner of speaking, any decision China makes about its fossil fuel use translates as a global impact, positive or negative. Any such decision that significantly reduces coal consumption in particular will reduce emissions. Here is not the place to do a deep dive on the question of China's concern for the climate, but a recent survey by the European Investment Bank shows that 73% of Chinese people feel climate change defines the number one challenge facing society, compared with just 39% in the U.S. and only 47% in Europe. Finally, it can be argued that, from the Chinese point of view, success breeds itself. The shale gas resource is simply too vast to ignore, and concrete results have been better than anticipated. For more than two decades, a central goal of government five-year plans has been to develop China's domestic energy resources. Despite a tentative start, shale gas is now a growing part of the plan.
Times of Oman
6 days ago
- Business
- Times of Oman
India eyes expanded US energy imports to diversify sources, balance trade
Paris: India is exploring increased imports of American shale gas, liquefied natural gas, and crude oil to diversify its energy sources and leverage competitive US pricing, a senior official said as both countries prepare for fresh bilateral trade negotiations. The strategy comes as India seeks to balance its growing trade surplus with the United States while capitalising on America's energy abundance and relatively lower prices compared to traditional suppliers. "There are several things we can buy from the US - for example, shale gas, LNG, crude oil," said the official, who requested anonymity. "The more diversified our sources, the greater the benefit for us. Prices are also low in the US." The energy diversification plan aligns with India's broader goal of reducing dependence on traditional suppliers while taking advantage of America's shale revolution, which has transformed the US into a major energy exporter. India's energy imports from the US could help address the bilateral trade imbalance, where India maintains a significant surplus. The US remained India's largest trading partner for the fourth consecutive year in 2024-25, with bilateral trade valued at USD 131.84 billion. Negotiating teams from both countries will begin the next round of discussions this week in Paris on the proposed bilateral trade agreement. However, officials acknowledge significant uncertainties stemming from the Trump administration's trade policies. The official cited concerns about potential increased tariffs on steel and ongoing legal challenges to US tariff decisions. "A lot of uncertainties are there at present," the official said, referring to developments including court orders affecting US tariff policies. Despite these challenges, India remains committed to finding mutually beneficial pathways. "Within the constraints of uncertainties, India has to find pathways which are good for the country," the official stated. The bilateral trade framework announced in February by President Donald Trump and Prime Minister Narendra Modi aims to negotiate the first phase of a comprehensive trade agreement by fall 2025. The ambitious goal seeks to more than double bilateral trade to USD 500 billion by 2030 from the current USD 191 billion. Currently, the US accounts for approximately 18 per cent of India's total goods exports, 6.22 per cent of imports, and 10.73 per cent of the country's total merchandise trade, making it a crucial economic partner. India has already reserved its right to impose retaliatory tariffs against US duties on steel and aluminium and has sought World Trade Organization consultations on US tariffs affecting auto components. When asked about potential similar measures on additional products, the official emphasized India's commitment to protecting its interests. "We will see what is good for India... accordingly we will take decisions," the official said, noting the current climate of uncertainty affecting trade policy decisions. While India seeks a "balanced and mutually beneficial trade agreement," officials acknowledge that final terms will depend on comparative advantages. "What we get as compared to other countries will determine what we ultimately finalise in the deal," the official explained. The energy import expansion represents one concrete area where both countries could benefit - India gains supply diversification and competitive pricing, while the US expands its export market and helps reduce the trade deficit.
Bloomberg
21-05-2025
- Business
- Bloomberg
Global LNG Suppliers Wager That China's Demand Slump Is Fleeting
Global gas giants are betting the current lull in Chinese demand is temporary, and that the country will underpin their multibillion-dollar investments for years to come. China's gas imports have fallen in 2025, a decline centered on seaborne shipments of liquefied natural gas that slumped 22% through April from the previous year. Demand for LNG — the fuel carried in super-chilled tankers — is headed for its first annual drop since the height of the pandemic, just as new export projects are slated to come online, led by the shale gas fields of the US.
Associated Press
14-05-2025
- Business
- Associated Press
Sinopec Sets New Vertical Well Depth Record of 5,300 Meters
BEIJING, May 14, 2025 /PRNewswire/ -- China Petroleum & Chemical Corporation (HKG: 0386, 'Sinopec') has announced a major shale gas exploration breakthrough of its Project Deep Earth - Sichuan and Chongqing Natural Gas Base, that its Tiebei 1HF well has been tested at a high daily output of 314,500 cubic meters of industrial gas flow. The vertical depth of the well reaches over 5,300 meters with a 1,312-meter-long horizontal section, setting a new record for vertical depth of shale gas wells in China. The breakthrough will boost the gas reserves and production efficiency in the Puguang area as well as contribute to the development of ultra-deep shale gas in the Sichuan Basin. The Puguang gas and oil field is the first extra-large deep and high-sulfur gas field in China with large-scale development and has been efficiently developed for 20 years. To achieve the goal of long-term stable shale gas production, Sinopec is constantly looking for new resources and eyed the Puguang Upper Permian, but most of the resources are distributed in the ultra-deep field with a burial depth of over 4,500 meters, which is regarded as a 'forbidden zone' because of the rapid changes in the velocity of the strata. Sinopec tackled the bottleneck through extensive research and technological innovations to realize a 100 percent drilling encounter rate of high-quality shale in horizontal section with drilling precision comparable to 'threading a needle in the deep underground' to eventually drill the Tiebei 1HF well successfully. Sinopec's self-developed 175 MPa ultrahigh-pressure (UHP) fracturing equipment dynamically optimizes the parameters on-site with different strategies for each section and opened up a 'man-made gas road' in the high-pressure stratum at the depth of 5,300 meters, bringing back all the resources from the deepest and farthest ends of the gas reservoir to maximize the development. At present, Sinopec Zhongyuan Oilfield is preparing an overall exploration and development plan for the Upper Permian shale gas in Puguang to promote the efficient transformation of resources. The exploration and development of shale gas are of strategic importance to China's energy landscape, and Sinopec actively takes the responsibility and discovered the Fuling shale gas field in 2012, which kicked off commercial development of shale gas in China, and Sinopec continues to promote high-quality development of China's shale gas industry. For more information, please visit View original content to download multimedia: SOURCE SINOPEC
