With the world’s largest shale gas reserves, China is spending billions to catch up to the US in developing its shale gas reserves and become more energy independent. China holds 25.08 trillion cubic meters of exploitable onshore shale gas, while the U.S. has 13.65 trillion cubic meters of technically recoverable gas from shale formations. However, China has some challenges with access to water and technology that will see them spend nearly four times the amount of money – so development of shale gas in China will come at a high cost. It seems China is prepared to invest what is necessary to make it happen.
The Chinese government as mandated targets for state-owned-enterprises (SOE) such as Sinopec (China Petroleum & Chemical Corp).
Xiaolei Cao, an analyst at Bloomberg New Energy Finance, said in an interview. “For the government, shale is one of the highest priorities, and Sinopec is looking to distinguish itself by making gains in shale.” and estimates that Sinopec will spend an average of $10 million per well at its Fuling site compares with costs as low as $2.6 million a well in parts of the U.S.