OREANDA-NEWS. May 14, 2014. Natural gas consists of conventional natural gas and unconventional natural gas. Shale gas is included in unconventional natural gas. Compared with conventional natural gas, shale gas is featured with low abundance, low porosity and permeability, low recovery ratio, large reserves and long lifespan of a single well.

The global shale gas resources are mainly distributed in North America and Asia, which accounted for 29% and 27% of the exploitable shale gas resources in 2011 respectively. The United States is the earliest and most successful country in the development of shale gas. In 2011, its shale gas output shared 27.8% of the country's natural gas output, thereby making its self-sufficiency rate of natural gas up to 94.4% and reducing its import volume significantly. The success of the United States has prompted the world's major countries to enhance shale gas exploration and development.

China has long been using coal as the main energy. In China's energy consumption, coal accounts for over 60%, while natural gas only occupies about 5%, far below the world average, so natural gas has huge development potentials in China. In recent years, China's demand for natural gas has witnessed rapid growth, but the output growth has been slow, leading to increasing dependency on the import of natural gas, which reached 26.2% in 2012. To reduce the risk incurred by the high dependency and ease the contradiction between supply and demand, China is accelerating the exploration and development of shale gas and other unconventional natural gas.

In 2012, China's potential volume of mineable shale gas hit 25 trillion cubic meters (excluding the shale gas in the Qinghai and Tibet), almost same with that of China's land conventional natural gas. At present, China shale gas industry is still in its infancy, with daily output of about 540,000 cubic meters. Main mining enterprises include PetroChina, Sinopec and Yanchang Petroleum. In 2015, the shale gas industry will enter a rapid development stage in the wake of the completion of China's potential shale gas resource survey. By 2020, shale gas will become an important part of China's natural gas energy, with an ouput of 100 billion cubic meters.

From 2011 to now, Ministry of Land and Resources of China invited bids for shale gas exploration rights twice and allowed private enterprises to participate in. In the second round of bidding, two private companies won the bids. The third round of bidding will be held in early 2014, and still open to small and medium private enterprises, providing equal opportunities for private capital.

As most core technologies of shale gas mining equipment are mastered by foreign enterprises, the cooperation with such enterprises will bring some market share quickly. The current development shows that oil service companies and oilfield equipment manufacturers such as SINO Geophysical and LandOcean specializing in data processing and interpretation, Jereh engaged in fracturing equipment and services, Tong Oil Tools focusing on composite penetrators and services are more likely to enjoy benefits.