China begins shale gas tendering

First contracts to domestic companies, with foreign tenders to follow

China's energy demand is booming, and accounts for over 20% of the world total. GETTY IMAGES
China's energy demand is booming, and accounts for over 20% of the world total. GETTY IMAGES

China issued its first shale gas exploration tender with an offer of four blocks to a group of Chinese energy companies, state media reported on Tuesday, as the country kicks off its search for the potentially vast unconventional resource, reports Reuters.

The blocks are mostly in the southwestern provinces of Chongqing and Guizhou and cover an area of 11,000 square kilometres, smaller than an earlier announced plan to offer eight blocks with an area of 18,000 sq km.

China's nascent shale gas industry has attracted the attention of global energy companies such as Shell, BP and US independents such as Hess Corp and Newfield Exploration.

The Ministry of Land and Resources issued the tender to PetroChina, China Petroleum and Chemical Corp (Sinopec) , CNOOC, Shaanxi Yanchang Petroleum Group and two coal seam gas companies, the official Xinhua News Agency said on its website. The companies had submitted tenders in response, it added.

The auction comes several months later than expected as the ministry was trying to bring more companies, such as Sinochem Corp and Zhenhua Oil, into the competing round. The Xinhua report did not mention these companies.

An MLR official has said that more tenders would follow but they would target only Chinese companies, while foreign companies were welcome to join hands with Chinese parties for evaluation and exploration.

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