Twelfth Five-Year Rock Gas Planning Report, Unconventional Gas Development or Release

Pan Jiping, researcher of the Oil and Gas Resources Strategic Research Center of the Ministry of Land and Resources, disclosed on June 30th at the China International LNG Conference that China's “12th Five-Year Plan Rock Gas Planning” has been submitted to the State Council and China will increase unconventional natural gas such as shale gas. The development, while introducing more market competition mechanisms to participate in the development.

Unconventional natural gas mainly includes shale gas, tight gas, coalbed gas, and natural gas hydrates. Pan Jiping told the reporter of the “First Financial Daily” that reserves of unconventional natural gas such as shale gas are expected to be larger than conventional natural gas, but shale gas development in China is still in its infancy. China has established the National Shale Gas Development Research Center to promote the development of shale gas.

At present, "owing to the lack of core technology, shale gas exploration, development and later use in China have been constrained." Pan Jiping said that the development and utilization of shale gas urgently need to strengthen technical research, while increasing policy support. He said that China will gradually open its market in the future and introduce more market competition mechanisms so that more market players will join the development of unconventional natural gas.

But research institutions are not optimistic about the profitability prospects of developing unconventional natural gas. A senior analyst in the energy industry, who asked not to be named, told reporters that the development of unconventional natural gas such as shale gas is very difficult, and the cost of development is far greater than that of conventional natural gas, and its profitability is not strong. He said that even if the country opens its markets, it is difficult for ordinary companies to participate in the development of unconventional natural gas such as shale gas, and it is difficult to obtain economic benefits in the short term.