The country plans to pump 6.5 billion cubic meters of the fuel annually by 2015 and commercialize the production by the end of the decade. However, analysts said the goal is too high to achieve. China has only conducted two rounds of auctions for shale gas exploitation blocks, with the latest held in October.
Investment research published by UBS on Tuesday estimated that China's shale gas business will be only lucrative enough for mass exploitation if the costs of extraction in the country's primary reserves can decline below 2.3 yuan per cubic meter. The process would take at least 5 to 10 years, according to the report.
The country needs to drill 20,000 shale gas wells by 2020, but so far it has only completed 63 wells, said Jiang Xinmin, a researcher with energy research institute at National Development and Reform Commission, China's primary economic regulator.
Analysts predict that even just to fulfill the goal of 6.5 billion cubic meters set for 2015, China needs to dig more than 100 shale gas wells annually in next three years.
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