China Poised for American-Style Shale Boom

Lessons learned from U.S. model

The lessons taken from U.S. shale gas successes hold major implications for China’s energy future, according to researchers at the Energy and Geoscience Institute at the University of Utah.

The similarities and potential are explored in a paper to be presented at the AAPG International Conference and Exhibition this month in Istanbul, Turkey.

The authors are AAPG members Shu Jiang and Thomas Anderson, plus Jinchuan Zhang, Dongsheng Zhou and Zhengyu Xu.

Since the mid-1980s, “EGI has accumulated tons of knowledge from exploration to production based on years of research on successful North American shales and emerging China shales, South American Shales, India shales, Central Eurasia shales and others, which will help apply science from global research to China’s oil and gas exploration,” Shu said.

Made in China

Assessments based on U.S. shale gas and oil experience show China has the largest recoverable shale gas resource in the world (886 TCF based on recent China Ministry of Land and Resources data and 1,115 TCF, based on recent EIA data), Shu said.

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The lessons taken from U.S. shale gas successes hold major implications for China’s energy future, according to researchers at the Energy and Geoscience Institute at the University of Utah.

The similarities and potential are explored in a paper to be presented at the AAPG International Conference and Exhibition this month in Istanbul, Turkey.

The authors are AAPG members Shu Jiang and Thomas Anderson, plus Jinchuan Zhang, Dongsheng Zhou and Zhengyu Xu.

Since the mid-1980s, “EGI has accumulated tons of knowledge from exploration to production based on years of research on successful North American shales and emerging China shales, South American Shales, India shales, Central Eurasia shales and others, which will help apply science from global research to China’s oil and gas exploration,” Shu said.

Made in China

Assessments based on U.S. shale gas and oil experience show China has the largest recoverable shale gas resource in the world (886 TCF based on recent China Ministry of Land and Resources data and 1,115 TCF, based on recent EIA data), Shu said.

“If the shale gas development in China is as successful as in the United States, it will extract clean gas from the largest shale gas resources and help China’s GDP to keep growing at a remarkable rate and build a resource-conserving and environmentally-friendly society,” he said.

“At present, dirty coal makes up 70 percent of the fuel needed to power China’s economy and China’s natural gas consumption only accounts for 4 percent of its energy mix, compared to the global average of 24 percent, due to its huge energy demand and limited natural gas supply,” he said.

“By 2020, China’s natural gas consumption will reach 400 billion cubic meters and the demand gap will be 200 billion cubic meters since the conventional gas production will be only 200 billion cubic meters at that time. China is relying on shale gas to fill this gap,” Shu said.

“Vast emerging and potential shale gas plays spanning in age from Paleozoic to Cenozoic are widely distributed in China” and more than 300 wells have been drilled, targeting marine, transitional and lacustrine shale gas and shale oil, he said.

Using U.S. methodology based on mineralogy, petrophysics, depositional, geochemical and well logs characteristics, the Chinese identified Barnett-like Silurian Longmaxi marine shale in Sichuan Basin in southwestern China, he said.

This has led to commercial production by Sinopec in the Fuling area in Sichuan Basin.

“The highest production rate is about 19.1 million cubic feet per day from the Silurian horizontal shale well,” which is comparable to some of the best U.S. shale gas wells, Shu said.

“Horizontal drilling and slick water hydraulic fracturing technologies developed in the United States have been borrowed ... to prepare to develop vast China shale resources. The shale reservoir characterization, horizontal drilling and slick water hydraulic fracturing technologies have made China the first country outside North America to successfully develop a fifth shale gas field – Jiaoshiba Shale Gas Field in Fuling, Chongqiong, southwest China,” he said.

“The lithofacies of U.S. producing shales include siliceous shale, carbonate rich shale (Eagle Ford), chalk (Niobrara), dolomite (Bakken), and more,” he added. “This has been applied by PetroChina and Sinopec to shale gas and shale oil exploration.”

Costly Process

Major differences also have been identified, including complex depositional and tectonics and stress setting, surface-ground conditions and maturity level, Shu said.

The lacustrine and transitional shales are clay-rich and difficult for fracturing using slick water techniques developed in the United States for brittle marine shale.

“The rugged ground and complex subsurface geology in China cost at least twice as much for fracing than in the United States,” he said.

Tectonic activities may have allowed much of the accumulated gas to leak, according to the work of Shu and his colleagues.

“Complex stress/geomechanics setting caused by complex tectonic activities in China also make shale gas fracing to generate large stimulated reservoir volume way more difficult than in the United States,” he said.

The EGI is the world’s largest university-based industry cost-shared upstream E&P research program of its kind, with more than 70 corporate associate members representing 20 countries.

The EGI conducts multi-disciplinary geology and conventional-to-unconventional petroleum exploration and production projects in 70 countries on seven continents.

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