China appears to have been rather successful in the development of its shale gas industry over the last five years, much to the dismay of Russia. The country has already identified 54 main shale gas fields, with more than 800 gas holes drilled over an area of 170 thousand square kilometers.
From 2009 to 2014 China has invested around $3.7 billion in the research and development of its own shale gas fields, with an active investment campaign continuing during the current year.
According to statistics from the end of last year, the Chinese shale industry is able to produce about 1.5 billion cubic meters of gas. The government is hoping to increase this to 6.5 billion cubic meters during 2015, with the target of producing 30 billion cubic meters of shale gas annually by 2020.
The Chinese Ministry of Land and Resources and the State Geological Service have released an official report which claims that over 500 billion cubic meters of shale gas reserves were discovered during 2014. Over 20% of these reserves are located in areas which belong to state-owned Sinopec.
During the latest summit of BRICS representatives which took place in Ufa, Russia, it seemed China may have lost some of its interest in implementing co-operative energy projects. If this is true, the rapid development of the Chinese shale industry is very likely the reason behind the government’s cooling enthusiasm over the “Power of Siberia” and “Altay” projects.
This situation could obviously have a significant effect on Russian gas exports, particularly from Gazprom whose level of production exceeds the level of sales at the moment. Alexey Miller, head of Gazprom, has already reported to President Vladimir Putin potential problems in the Russian energy sphere.
Additional reporting by Dmitrii Zaitsev
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