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China taps shale gas through combined efforts (4)

(Xinhua)

08:13, October 08, 2012

Eyeing the future

The nation is now mulling favorable policies, including introducing subsidies and tax breaks for the sector to support its development, an official with the MLR said in late September.

Prior to any specific incentive being rolled out, local governments and individual enterprises have long been preparing to broaden their shares of the fledgling business.

"Both local authorities and companies are reaching out for the future. The returns might be small at the present, but they have formed their goals of development," an energy analyst told Xinhua's Outlook Weekly.

One of the latest moves took place in August in Southwest China's Chongqing municipality, in which the municipal government set itself a shale gas annual output target of 1.3-1.5 billion cubic meters by 2015.

The recoverable reserves of the region are now estimated at 2.05 trillion cubic meters.

Earlier in June, Jiangxi province founded the country's first research institute specializing in shale gas exploitation. The eastern province is also one of the national pioneers in the geological survey and assessment of shale gas reserves.

Domestic companies, including the five State-run energy giants and provincial-level energy firms are also eyeing the future of the shale gas boom, strengthening their cooperation ties with local governments.

Coal-fired thermal power, which accounts for about 70 percent of China's power capacity, has made power companies very susceptible to coal price fluctuations.

The development of the new, alternative energy source could help taper down the coal price hikes, and power companies would have more say in negotiations with their coal suppliers, industry insiders said.

Earlier media reports said China aims to pump 6.5 billion cubic meters of shale gas by 2015, and the commercialization of shale gas production can be expected in the 13th Five-Year Plan period (2016-20).

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