Natural Gas Development in China Accelerates Unconventional Natural Gas as an Effective Supplement

Natural gas has a low carbon content and is a relatively clean fossil energy source. China's natural gas resources are relatively abundant. Exploring and developing natural gas resources is an important way to adjust energy structure and realize low-carbon development. Relevant predictions suggest that in the next decade, the share of natural gas in China's primary energy consumption may increase from 3.9% in 2009 to more than 10%.

China's natural gas development has accelerated the pressure on energy structure adjustment and its commitment to “a 40% to 45% reduction in the carbon dioxide emissions per unit of GDP by 2020” requires that China must attach great importance to the utilization of natural gas.

On December 31, 2010, the Shanxi-Tianjin Third Line from Xilin, Xilin, and Xixi, to the west, reached Beijing. The imported natural gas from Central Asia and natural gas from Changqing Gas Field were sent along the pipeline to Beijing and North China. It can add 2,000 yuan per day. Million cubic meters of natural gas supply capacity. It was completed on the last day of 2010. The opening of the Shanxi-Beijing line marked a successful conclusion for the development of the natural gas industry during the “11th Five-Year Plan” period.

During the "11th Five-Year Plan" period, China's natural gas industry has achieved rapid development. At the just-convened National Energy Work Conference, the person in charge of the National Energy Administration stated that during the “Eleventh Five-Year Plan” period, China has built large-scale gas fields such as Tarim, Changqing, and Puguang, and discovered gas fields such as Liwan Bay. The natural gas pipelines in the western part of the second line, Sichuan-to-East China gas pipeline, and Shaanxi-Beijing line have a total natural gas pipeline length of 40,000 kilometers.” According to statistics, in 2010, China’s natural gas production reached 95 billion cubic meters, with a consumption of 120 billion cubic meters, respectively. It was 1.9 times and 2.6 times that of 2005.

"The rapid development of China's natural gas during the "Eleventh Five-Year Plan" period is in line with the trend of low-carbon development and will occupy a more important position in China's energy structure," said Liu Yijun, a professor at the China University of Petroleum.

On December 18, 2009, Premier Wen Jiabao of the State Council held a summit meeting of the Copenhagen Climate Change Conference in Denmark and promised the world that by 2020, China’s CO2 emissions per unit of GDP fell by 40% to 45% compared to 2005. This commitment is an important measure for China to transform its economic development mode and achieve scientific development. It shows China's responsible attitude and determination to save energy and reduce emissions. The energy industry must make major breakthroughs in low-carbon energy to achieve this goal, and natural gas It is the key.

“To vigorously develop natural gas is the best choice for China to reduce carbon emissions in primary energy consumption. At least until 2035, fossil energy such as coal, oil, and natural gas will continue to be the main source of energy supply in our country, especially coal, which will ensure China’s energy security. China still plays a fundamental role. How to reduce coal, control oil, and increase the proportion of natural gas in primary energy consumption will be an important task for China to adjust and optimize its energy structure and achieve emission reduction targets during the 12th Five-Year Plan period." Zeng Xingqiu, former chief geologist of Sinochem Group, said.

In fact, China's natural gas exploration and development has made great progress in the past decade. As of the end of September 2010, the western section of the Second West-East Gas Pipeline was put into operation, together with the first phase of the West-East Gas Pipeline project that had been completed, and accumulated to the eastern part of China. The transmission of 66 billion cubic meters of natural gas is equivalent to reducing 78.26 million tons of coal transportation and reducing carbon dioxide emissions by 290 million tons.

"Compared with the United States and Russia, China's natural gas industry started relatively late. We can learn from their experiences and lessons, scientifically plan and introduce technologies to promote the rapid development of China's natural gas industry. On the one hand, we can replace high-carbon energy such as coal and reduce carbon emissions. On the other hand, it can also reduce crude oil imports and reduce foreign dependence," Zeng Xingqiu said.

The “Twelfth Five-Year Plan” will continue to push forward If the “Eleventh Five-Year Plan” is a period of rapid development of China's natural gas industry, during the “Twelfth Five-Year Plan” period, the natural gas industry will develop to a new level.

“From the current state of China’s natural gas industry development and market environment, during the “12th Five-Year Plan” period, China’s natural gas industry will develop to a new level,” said Liu Yijun.

First of all, from the perspective of natural gas supply networks, during the “Eleventh Five-Year Plan” period, China explored and built a number of oil and gas fields. Secondly, through our efforts, China has initially formed a natural gas pipeline network that spans east and west, runs through the north and the south, covers the entire country, and connects overseas, and gradually realizes a natural gas supply situation that ensures diversification, networked resource allocation, and automatic pipeline management. The demand for clean energy is also gradually increasing. The demand for natural gas in China will continue to flourish. Experts believe that the demand for natural gas in China will grow faster than coal and oil. Huge demand will prompt the natural gas industry to invest more and grow faster.

In view of the huge development potential and advantages of natural gas, the National Energy Administration has also accelerated the guidance and planning of the natural gas industry. During the “Twelfth Five-Year Plan” period, China will increase its efforts in accordance with the concepts of “stabilizing the east, accelerating the western region, routine, and unconventional”. Exploration and development of key gas production areas such as Ordos, Chuanyu, Tarim, etc.; increase the production of the main gas field; speed up the construction of three annual gas production fields of 20 billion cubic meters in Tarim, Southwest, and Changqing; and actively develop offshore natural gas resources. At the same time, China will continue to accelerate the construction of oil and gas pipeline networks. In accordance with the needs of newly-built domestic oil and gas fields, and the need to increase production of old oil and gas fields, construction of natural gas pipelines such as the West-East Gas Pipeline III and the Northeast Pipeline Network will be strengthened. It is estimated that by 2015, the total length of domestic oil and gas pipelines will reach around 140,000 kilometers.

“The 11th Five-Year Plan has laid a good foundation for the development of natural gas in China. The domestic market is in great demand, and national policies support development. I believe that the natural gas industry in the “Twelfth Five-Year Plan” will have a broader development prospect. Naturally, China’s natural gas industry can accelerate development in the future. In the process, we will also encounter many new difficulties and problems," Zeng Xingqiu pointed out.

The seasonal contradiction between supply and demand is a major problem encountered in the development of natural gas in recent years.

Zeng Xingqiu believes that there are three main reasons for this problem: First, supply and demand are not balanced. In the past ten years, the natural gas market in China has developed rapidly. In some areas, the demand for hyper-planning has grown too much, causing a temporary shortage of resources. Secondly, supporting projects for gas transmission systems are lagging behind, and the peaking facilities for gas storage facilities are still under construction. Third, the energy consumption structure is monotonous, and the market's ability to adjust and balance is relatively poor. Zeng Xingqiu said that in order to solve the above problems, it is first necessary to take all factors into consideration. According to the development of resources, the natural gas market should be developed in a planned and systematic manner. Natural gas development must be synchronized with basic development of resources and market development. It is necessary to classify and plan natural gas users, specify priority, allowable, restricted, and prohibited types, and effectively control the pace of market development. Second, it is necessary to focus on providing the ability to supply peak shaving. The National Energy Administration has taken the acceleration of natural gas peaking capacity as the key to the development of the natural gas industry in the next few years. This year, China will use underground salt caverns and abandoned oil and gas fields to step up the construction of a number of natural gas storage tanks; accelerate the construction of five liquefied natural gas receiving stations in Jiangsu, Dalian, Shandong, Zhuhai, and Ningbo; and step up the construction of the east section of the West-East Gas Pipeline. The interconnection of natural gas storage tanks, LNG receiving stations, and national natural gas pipeline networks will increase the capacity of emergency peak shaving.

Unconventional Natural Gas Becomes an Effective Supplement Under the drive of market demand and technological progress, the conventional scale development of unconventional natural gas will become a reality.

Although China's natural gas industry is developing rapidly, it is expected to be optimistic in the future. However, there is still a large gap compared with the huge market demand.

Over the past 30 years, China's natural gas consumption has increased from 145 billion cubic meters in 1979 to 88.7 billion cubic meters in 2009, an increase of 512 percent. According to the forecast of the International Energy Agency, the demand for natural gas in China will increase to 444 billion cubic meters by 2030. There is a huge gap in the current growth rate of domestic production. How to make up for this gap? The first is the introduction of foreign natural gas to make up for the lack; the second is to increase the intensity of domestic resource development, including the development of conventional gas and unconventional gas. The government is actively planning and companies have increased their investment.

Recently, the Ministry of Commerce, the Ministry of Land and Resources, the National Development and Reform Commission, the National Energy Administration and other departments jointly issued notices and agreed to increase cooperation with China National Petroleum Corporation, China Petroleum & Chemical Corporation, and Henan Coalbed Methane Development and Utilization Co., Ltd. with foreign companies. Pilot projects for the extraction of coalbed methane resources have brought unconventional natural gas such as coalbed methane into sight. The prospects for the development of unconventional natural gas, whether it can quickly form a scale, has become a hot issue of concern.

The so-called unconventional natural gas refers to natural gas that is difficult to be extracted by conventional techniques because of relatively complicated storage conditions. CBM, shale gas, and natural gas hydrates (flammable ice) are all unconventional gases. Tight sandstone gas is not classified as unconventional gas, but it is difficult to develop technology.

According to calculations by relevant authorities, China’s unconventional natural gas resources are very rich. The reserves of coalbed methane alone amount to 38 trillion cubic meters, which is equivalent to that of conventional natural gas. Currently proven CBM production is mainly distributed in Ordos Basin and Qinshui Basin in Shanxi Province. In 2009, the output reached 7.1 billion cubic meters; China's shale gas resources have a wide distribution and a promising prospect. Only the Sichuan Basin has predicted that the shale gas reserves are twice that of the proven natural gas; a major breakthrough has been made in the exploration of natural gas hydrates in the South China Sea. The initial proven reserves of more than 190 billion tons have become the fifth country in the world to master gas hydrate exploration technologies. The total natural gas resources of tight sandstone in China is about 12 trillion cubic meters. In 2009, the production of tight sandstone gas in China was about 15 billion cubic meters, mainly from the Ordos Basin and the Sichuan Basin. If we can develop and utilize various types of natural gas resources, it will play a positive role in securing China's natural gas supply.

“The key to the development and utilization of unconventional natural gas is the introduction of new technologies from abroad and the innovation of practical technologies suitable for the geological conditions in China.” Zeng Xingqiu believes.

China has achieved major breakthroughs in the development of tight sandstone gas by means of international cooperation and the introduction of technology. Changqing Oilfield has achieved major breakthroughs in basic techniques such as fine description of gas reservoirs, low-cost, high-efficiency drilling, and reservoir stimulation, and other major technologies. In practice, it has been popularized and applied; unconventional natural gas mining technology has also made some achievements. In terms of coalbed methane, we have learned from the successful experience of coalbed methane exploration and development in foreign countries, combined with China's geological characteristics, and formed some coalbed methane exploration with independent intellectual property rights. The development of featured technologies; shale gas technology development in China is still in its infancy, but shale gas pilot pilot areas in six countries including Weibei, South Sichuan, Southeast Yunnan, and Northeast Yunnan have been established one after another. The State Key Laboratory of Petroleum Resources and Prospecting Chongqing page The Rock Gas Research Center was also established recently.

“China’s unconventional natural gas resources are abundant and the development prospects are encouraging. The most important thing for the moment is to do a good job of long-term planning, start from scratch, seek development, start from technological development, solidify the foundation for development, gradually form a scale, and effectively develop and use unconventional Natural gas fully taps the potential of unconventional natural gas resources in China, Zeng Xingqiu said.