China Petrochemical Corp.(Sinopec Group) plans to produce at least 2 billion cubic meters of shale gas annually by the end of 2015--around one-third of the country's targeted production of 6.5 billion cubic meters for that date, the official China Daily reported. China has shale-gas resources of 134 trillion cubic meters, of which 25 trillion cubic meters are recoverable. Sinopec owns three shale-gas blocks covering 17,000 square kilometers. So far, about 50 shale-gas wells have been drilled in China, but no commercial production has been announced. Shale gas development in China faces hurdles of lack of domestic drilling expertise and a tough geology. In 2012, the company will invest over CNY1 billion in the shale-gas and oil sectors, up from about CNY600 mln in 2011. The Chinese oil giant has finished drilling three shale-gas wells and is drilling another seven, including some in the Nanchuan block for which it won exploration rights in China's first shale-gas auction last July.
Sinopec completed joint environmental research on shale gas exploration with Exxon Mobil Corp. (XOM) in the Meigu block in Sichuan province last year. The company is also conducting a risk assessment with BP PLC at Guizhou's Kaili deposit and with Chevron Corp. at Guizhou's Longli field.