OREANDA-NEWS. April 03, 2014. A joint venture of China National Petroleum Corp (CNPC) and domestic companies has started drilling its first shale gas well in the southwest Sichuan province, CNPC said.
Sichuan Changning Natural Gas Development Co last week started drilling the Changning H3-6 well in Changning block and is expected to finish drilling in 70 days, CNPC said on its website (news.cnpc.com.cn).
Sichuan Changning Natural Gas Development Co was founded in Dec 2013 by CNPC, Sichuan Energy Investment Co, Yibin State Assets Operation Co and a Beijing investment fund. The company is China's first joint venture by an oil major and domestic companies dedicated for shale gas development, it said.
CNPC, parent of PetroChina , plans to drill some 50 shale gas wells in Changning block this year. Shale gas production in Changning block is expected to be 1.0 billion cubic metres in 2015, it said.
Changning block, spanning 4,200 square kilometres, is in one of China's most promising shale gas development areas.
CNPC Chairman Zhou Jiping said this month the company planned to open six business areas to private investors, including unconventional oil and gas exploration and development.
China's total shale gas output topped 200 million cubic metres in 2013, according to the Ministry of Land and Resources. The government has set its shale gas production target at 6.5 billion cubic metres in 2015.
China, believed to hold the world's largest resources of shale gas, hopes to replicate the production success of the United States, but faces huge technological and environmental challenges because of its more complex geology and water scarcity.