China will hold its second auction for shale gas in the fourth quarter of this year, aiming to include a larger group of Chinese firms in the bidding, Reuters reported. The first shale gas tender in June awarded half of the blocks to Sinopec (SHI.NYSE) and a provincial coal seam gas company. China has virtually no shale gas output today, but may have as much as 26 trillion cubic meters of reserves, the world’s largest. While still in early planning stages, the government is hoping to produce 6.5 billion cubic meters of shale gas by 2015, and 80 billion by 2020. The upcoming tender is open to Chinese companies only, although foreign companies will be allowed to partner with the winning bidder. Smaller firms may need to obtain mining licenses before participating.