Sinopec will put its first shale gasfield into commercial operation sooner than expected, aiming for annual production of 10bn cubic metres by 2017 as China seeks to reduce its reliance on imported oil and gas.
China’s second-largest oil company is positioning itself as the flag-bearer of a drive to develop domestic fuel as the country seeks to mimic the US shale gas revolution. Sinopec’s decision could help China reach its target of producing 6.5 bcm from shale by 2015.
Sinopec engineers were excited by initial results at wells drilled this year at Fuling, near the southwestern city of Chongqing. The company plans Fuling to reach 1.8 bcm a year by the end of 2014, rising to 5 bcm by 2015, well above its earlier target of 2 bcm by next year from all its shale plays. Media reports say it could spend $4bn on Fuling, a number the company did not confirm. Proceeds from a sale of a 30 per cent stake in its petrol stations could be ploughed into shale.