China forecasts surge in shale gas production

A plan drafted by China’s National Energy Administration forecasts the country’s annual shale gas output to skyrocket from zero in 2012 to 6.5 billion cubic meters in 2015 and at least ten times that by 2020, The Wall Street Journal reported. The government is encouraging power generators to shift to gas from coal, which currently generates about 70% of the country’s electricity. The Ministry of Land and Resources has estimated China’s shale gas reserves at 25.08 trillion cubic meters, while the US Energy Information Administration puts them at 36.1 tcm. The NEA report urges Chinese companies to work with foreign corporations and research institutes to work towards replicating the boom in shale-gas output seen in US in the past decade. In related news, Total SA (TOT.NYSE) revealed a new pact with Sinopec Group last week to search for and produce shale gas. Under the terms of the deal, China’s State Administration of Foreign Exchange now owns 2% of Total.