during the 12th Five-Year Plan (2011–15). Joint
ventures between Sinopec/CNPC and local
enterprises have been formed at Fulin (Chongqing), Changning (Sichuan) and other shale gas
blocks.
Third, coalbed methane (CBM). China has
abundant CBM resources. According to the 2015
evaluation by the Ministry of Land and Resources of the PRC, China’s geological reserves of
CBM in the five major blocks were 30.05 trillion
cubic metres, of which 12.5 trillion cubic metres
were recoverable. The North China block boasts
the biggest deposits, with geological reserves
accounting for 46% and recoverable deposits
41% of the total. Most of China’s CBM resources are in the Erdos and Qinshui basins. In 2016,
another 57.612 bcm of geological reserves were
proven, a huge increase on the previous year.
The CBM industry enjoys rapid development.
Driven by coal mine gas governance and a
broadening supply of gas, China began to
research, explore and exploit CBM in the 1990s.
Small-scale industrialised production of CBM
was achieved during the 11th Five-Year Plan
(2006–10). By 2016 China had invested RMB
1.591 billion in CBM exploration and production, with 87 drilled wells and 97 development
wells. 4.495 bcm of CBM was produced on land
in 2016.
The industrial policy system for CBM is
basically in place. During the 12th Five-Year
Plan (2011–15), the State Council issued Opinions on Further Strengthening Coal-mine Gas
Prevention and Control, followed by Opinions on
Further
Accelerating
Coalbed
Methane
(Coal-mine Gas) Extraction and Exploitation.
Government authorities followed up on these
policies by issuing the Coalbed Methane Industry
Policies and Action Plans for Coalbed Methane
Exploration and Exploitation. They also introduced preferential policies, such as refunding
VAT on electricity generated with coal mine gas,
which improved the CBM industrial policy system. Major coal provinces developed and
implemented support policies. In addition to
subsidies from central government, Shanxi and
Shaanxi provinces subsidised the extraction and
use of CBM at RMB 0.1 per cubic metre. In
Hunan province, each new gas-fired power plant
receives RMB 800,000–1 million as an incentive.
Anhui, Henan and Guizhou provinces have
established special-purpose funds to support the
extraction and use of coal mine gas.
Fourth, natural gas hydrate. Natural gas
hydrate deposits are abundant in polar tundra
sandstone and seabed sandstone. Estimated
reserves are currently 83.7 trillion cubic metres,
mainly in the South China Sea and Qinghai-Tibet
Plateau tundra. China has made breakthroughs in
natural gas hydrate development. The Blue
Whale 1 rig is in production and 20 key technologies have been innovated. China is the first
country to produce combustible ice in a safe and
controllable pilot project in an argillaceous silt
reservoir. Natural gas hydrate was successfully
produced in a trial project in May 2017 in the
South China Sea for 60 consecutive days.
309,000 m
3 of gas were produced in total. The
project set a world record in terms of duration
and volume.
(2) Problems and challenges
China’s unconventional gas has entered the
stage of rapid development, but obstacles still
exist in technology, systems, policy and costeffectiveness.
First, China does not completely master the
technologies. CBM deposits in China are complex and demanding in terms of development
technologies. Fundamental breakthroughs in
basic theories and technical processes have yet to
be made for the development of CBM from
low-permeability, high-stress tectonic coal. The
economical use of low-concentration coal gas
and surface hole extraction in mining areas also
needs to be improved. As for shale gas, China
has not mastered deep-stratum development
technologies yet, making the extraction of shale
gas resources at depths greater than 3,500 m in
south Sichuan a great challenge.
Second, there is insufficient market competition. Currently, the exploration and production of
tight gas, CBM and shale gas are dominated by
several state-owned enterprises that are supervised and regulated by the central government.
382
S. Zifeng and N. Dickens
ventures between Sinopec/CNPC and local
enterprises have been formed at Fulin (Chongqing), Changning (Sichuan) and other shale gas
blocks.
Third, coalbed methane (CBM). China has
abundant CBM resources. According to the 2015
evaluation by the Ministry of Land and Resources of the PRC, China’s geological reserves of
CBM in the five major blocks were 30.05 trillion
cubic metres, of which 12.5 trillion cubic metres
were recoverable. The North China block boasts
the biggest deposits, with geological reserves
accounting for 46% and recoverable deposits
41% of the total. Most of China’s CBM resources are in the Erdos and Qinshui basins. In 2016,
another 57.612 bcm of geological reserves were
proven, a huge increase on the previous year.
The CBM industry enjoys rapid development.
Driven by coal mine gas governance and a
broadening supply of gas, China began to
research, explore and exploit CBM in the 1990s.
Small-scale industrialised production of CBM
was achieved during the 11th Five-Year Plan
(2006–10). By 2016 China had invested RMB
1.591 billion in CBM exploration and production, with 87 drilled wells and 97 development
wells. 4.495 bcm of CBM was produced on land
in 2016.
The industrial policy system for CBM is
basically in place. During the 12th Five-Year
Plan (2011–15), the State Council issued Opinions on Further Strengthening Coal-mine Gas
Prevention and Control, followed by Opinions on
Further
Accelerating
Coalbed
Methane
(Coal-mine Gas) Extraction and Exploitation.
Government authorities followed up on these
policies by issuing the Coalbed Methane Industry
Policies and Action Plans for Coalbed Methane
Exploration and Exploitation. They also introduced preferential policies, such as refunding
VAT on electricity generated with coal mine gas,
which improved the CBM industrial policy system. Major coal provinces developed and
implemented support policies. In addition to
subsidies from central government, Shanxi and
Shaanxi provinces subsidised the extraction and
use of CBM at RMB 0.1 per cubic metre. In
Hunan province, each new gas-fired power plant
receives RMB 800,000–1 million as an incentive.
Anhui, Henan and Guizhou provinces have
established special-purpose funds to support the
extraction and use of coal mine gas.
Fourth, natural gas hydrate. Natural gas
hydrate deposits are abundant in polar tundra
sandstone and seabed sandstone. Estimated
reserves are currently 83.7 trillion cubic metres,
mainly in the South China Sea and Qinghai-Tibet
Plateau tundra. China has made breakthroughs in
natural gas hydrate development. The Blue
Whale 1 rig is in production and 20 key technologies have been innovated. China is the first
country to produce combustible ice in a safe and
controllable pilot project in an argillaceous silt
reservoir. Natural gas hydrate was successfully
produced in a trial project in May 2017 in the
South China Sea for 60 consecutive days.
309,000 m
3 of gas were produced in total. The
project set a world record in terms of duration
and volume.
(2) Problems and challenges
China’s unconventional gas has entered the
stage of rapid development, but obstacles still
exist in technology, systems, policy and costeffectiveness.
First, China does not completely master the
technologies. CBM deposits in China are complex and demanding in terms of development
technologies. Fundamental breakthroughs in
basic theories and technical processes have yet to
be made for the development of CBM from
low-permeability, high-stress tectonic coal. The
economical use of low-concentration coal gas
and surface hole extraction in mining areas also
needs to be improved. As for shale gas, China
has not mastered deep-stratum development
technologies yet, making the extraction of shale
gas resources at depths greater than 3,500 m in
south Sichuan a great challenge.
Second, there is insufficient market competition. Currently, the exploration and production of
tight gas, CBM and shale gas are dominated by
several state-owned enterprises that are supervised and regulated by the central government.
382
S. Zifeng and N. Dickens