Large-scale commercial development of shale gas requires targeted policies

Abstract shale gas is the hottest concept in China's energy field. On December 6, the Ministry of Land and Resources announced the results of the second block bidding. In addition to one block, 20 blocks were not included in the standard. Oil and gas development company. This is the first time that China’s oil and gas development has opened to private enterprises...
Shale gas can be said to be the hottest concept in China's energy field. On December 6, the Ministry of Land and Resources announced the results of the second block bidding. In addition to one block, the 20 blocks were not included in the standard, and most of them fell into non-oil and gas. development company. This is the first time that China's oil and gas development has been opened to private enterprises. Although there are many participants, it is still the most seized by state-owned enterprises.

Shale gas is a new energy in the energy field in the past two years. With the success of shale gas development in the United States, the attention of countries to shale gas is also heating up. China's shale gas resource reserves rank among the top in the world. According to the census data released by the Ministry of Land and Resources in March 2012, the potential of China's land shale gas geological resources is 134.42 trillion cubic meters, and the recoverable resource potential is 25.08 trillion cubic meters. (excluding the Qinghai-Tibet area), and EIA's 2011 assessment of the potential of shale gas resources in China's major basins was 36.1 trillion cubic meters. Regardless of the caliber, China has the potential for shale gas resources, which has the potential for development.

Drawing on the successful experience of developing shale gas in the United States, China has also formulated relevant development strategies and introduced a series of support policies. In addition to the above-mentioned exploration rights bidding, recently, the shale gas development plan and the shale gas price subsidy program have been introduced. And other policies, Zhang Yuqing, deputy director of the National Energy Administration, said at an international symposium recently that the National Energy Administration is working with relevant departments to study and formulate the "Shale Gas Industry Policy." The policy is promising and attracts a lot of investment.

However, in contrast to the policy environment for the development of shale gas in China and the United States, analysts believe that there is still a gap. To replicate the successful experience of the United States, the shale gas policy needs to further break the monopoly pattern and break through the price barrier.

Resource pattern settled

The first public bidding for shale gas exploration rights was in June 2011, and only six state-owned enterprises were invited to bid for exploration rights in four blocks. The tender was first opened to private companies, so attention was extremely high.

According to the regulations, all registered capital in the territory of the People's Republic of China with registered capital of more than RMB 300 million, with oil and gas or gas mineral exploration qualifications, or with domestic enterprises with established qualifications, and Chinese-controlled Chinese and foreign companies Joint ventures can bid, and each bidder can bid up to 2 blocks.

However, from the results, the private enterprise won the bid is not high. According to media reports, as the top three companies in each block publicized, among the 83 enterprises that initially participated in the bidding, only 1/3 of the private enterprises accounted for only two of them, namely Yongtai Energy subsidiary Huaying Shanxi. Energy Investment Co., Ltd. and Beijing Titan Tongyuan Natural Gas Resource Technology Co., Ltd.

The winning bidders are mainly non-oil and gas state-owned enterprises, mostly state-owned coal power companies. In addition to PetroChina's only third place in the Hunan Sangzhi shale gas block, the four major oil companies did not have any gains.

However, most analysts believe that the failure of oil and gas companies to win the bid is not a lack of strength or other reasons, but their own will not be strong. In 2011, shale gas development was regarded as a major breakthrough in the oil and gas field for the exploitation of shale gas by private capital and foreign capital. At that time, the Ministry of Land and Resources listed shale gas as the 172th mineral, which will be classified as a separate mine. Investment management is carried out. However, as soon as the policy is introduced, it will face the problem of how to deal with the exploration and exploitation rights of shale gas resources in oil and gas blocks. These oil and gas blocks belong to the four major oil and gas companies.

On November 22, the Ministry of Land and Resources issued the “Notice on Strengthening the Exploration, Mining, Supervision and Management of Shale Gas Resources”, which clearly stated that the shale gas resources exploration and exploitation rights of the oil and gas overlapping blocks should be preferentially allocated to 4 Big oil company. 77% of the favorable block area and 80% of the resource potential of China's shale gas recoverable resources are in the existing oil and gas block. Therefore, the four major oil companies have obtained 70%-80% of shale gas resources. It is said that the resource pattern of the national shale gas has also been basically settled. Under this circumstance, the industry believes that oil and gas companies with most of the high-quality shale gas resources are not enthusiastic about the second tender.

However, Zhang Dawei, director of the Mineral Resources Reserves Evaluation Center of the Ministry of Land and Resources, said in an interview in the media in early November that the Ministry of Land and Resources is studying to encourage oil companies to increase investment in overlapping areas, if not met the minimum per square meter required for shale gas tendering. 30,000 yuan of survey input standards, then the block will re-enter the flow.

As the above notice also clarified that the four major oil companies can develop or cooperate with other companies to develop shale gas, industry insiders speculate that in the absence of technology and investment, these oil and gas companies may introduce foreign capital for joint development. In fact, because shale gas recovery is lower than conventional natural gas, conventional natural gas recovery is above 60%, and shale gas is only 5%-60%, so only through new technologies different from conventional oil and gas mining can Increase shale gas production and recovery, thereby reducing costs. At present, horizontal drilling and staged fracturing are the two most important technologies in shale gas mining, and only the United States has mastered the technology and adopted it on a large scale.

Sino-US industry environment has gaps

In an interview with China Investment, Niu Li, the economic forecasting department of the National Information Center, said that the Chinese government has recently introduced many policies to promote the development of shale gas. These measures have increased support for shale gas development for shale gas. The development of the industry has laid a good start.

In an interview with China Investment, Li Tie, a senior credit analyst, also said that in 2011, the Ministry of Land and Resources listed shale gas as a separate mineral for investment management, which will help break the monopoly of the three major oil companies on domestic oil and gas resources. It is conducive to the formation of competition pattern in the shale gas industry; the second round of bidding for shale gas prospecting rights indicates that private enterprises have officially entered the field of shale gas exploration and development for the first time, and the future development prospect of shale gas is promising.

The release of the two major "plans" made clear plans for the development goals and routes of China's shale gas industry during the "Twelfth Five-Year Plan" period. The specific objectives of the “12th Five-Year Plan” proposed in the “Shale Gas Development Plan” promulgated in March 2012 are: to basically complete the survey and evaluation of the national shale gas resource potential, and to initially grasp the national shale gas resources and their distribution, and optimize 30-50 shale gas prospects and 50-80 favorable target areas; proven shale gas geological reserves of 600 billion cubic meters, recoverable reserves of 200 billion cubic meters.

The "12th Five-Year Plan for Natural Gas" announced in December pointed out that shale gas should be incorporated into strategic emerging industries to foster and guide, promote the diversification of shale gas investment entities, strengthen the supervision and management of shale gas exploration and development activities, and promote Shale gas science development. With reference to the coalbed methane policy, research and formulation of specific shale gas financial subsidies and other support policies; mining rights holders or prospecting rights and mining rights applicants who have obtained shale gas exploration rights and mining rights according to law may apply for shale gas exploration in accordance with relevant regulations. Right to use and mining rights; for self-use equipment (including technology imported with equipment) that cannot be produced domestically under the encouraged projects such as shale gas exploration and development, the tariffs are exempted according to relevant regulations; the shale gas ex-factory price is subject to market pricing. Priority approval for land use.

In addition, Zhang Yuqing, deputy director of the National Energy Administration, said at an international symposium recently that the National Energy Administration is working with relevant departments to study and formulate the "Shale Gas Industry Policy." The policy is currently seeking internal input. Some media reports said that the policy may encourage investment diversification, mainly focusing on the appropriate opening of foreign investment, that is, allowing joint ventures to hold mining rights, and shale gas into the national foreign industry investment catalogue; flexible foreign cooperation In addition to product sharing, foreign cooperation will explore other models.

However, compared with the support policies and investment environment for shale gas development in the United States, large-scale commercial development of shale gas in China still needs to formulate more targeted industrial policies to create a more relaxed market environment.

Since the 1970s, the United States has successively introduced relevant laws to support the development of unconventional energy sources including shale gas. In 1980, the United States passed the "Crude Oil Accidents Profit Law," which provides for non-conventional energy development tax subsidy policies. The bill effectively stimulated the development of unconventional natural gas such as shale gas in the United States.

Li Tie said that in addition to the federal government, the state governments have also introduced policies to support unconventional oil and gas development. In Texas, for example, since the early 1990s, the mining tax on tight gas reservoirs has been reduced. Government subsidies are provided, of which the Barnett shale gas field in the Fort Worth Basin is greatly benefited.

More important is the advantage of the investment environment. The United States has also experienced the monopoly of oil and gas pipeline companies on the industry. Therefore, the US Federal Energy Regulatory Commission cancelled the control of the oil and gas pipeline company in the natural gas purchase and sale market in 1992, stipulating that the pipeline company can only engage in The transportation service has prevented the vertical monopoly of the industry, and the marketization of natural gas supply and marketing has greatly reduced the supply cost of natural gas.

The natural gas price system in the United States is also different from that in China. The higher natural gas price under the market-based pricing mechanism has stimulated people's enthusiasm for the exploration and development of unconventional oil and gas resources. From January 2003 to July 2008, demanded by the US natural gas price. All the way up, Louisiana's spot price fluctuated mainly between 200-400 US dollars / thousand cubic meters, and rose to more than 400 US dollars / thousand cubic meters several times, the price increase directly promoted the investment in shale gas exploration and development.

In addition, there are more than 8,000 oil and gas companies in the United States, and 85% of shale gas fields are produced by small and medium-sized companies. Small and medium-sized companies are technologically innovative under the pressure of high cost and low return, while large companies choose mature or potential. Small companies make acquisitions or cooperate with them. It is easier for the market to enter and exit, and the market competition is relatively high, which has effectively promoted the development and production of shale gas.

"13th Five-Year Plan" or large-scale commercial development

Li Tie believes that from the experience of shale gas development in the United States, from the beginning of the determination of the block, looking for the enrichment area worth developing, to the subsequent optimization development process, the time span takes 3-4 years, therefore, counting on our shale Large-scale commercial development in the short term is not realistic.

“At present, domestic shale gas exploration and development is still in its infancy, and it faces many problems such as inaccurate resource storage, poor storage conditions, backward infrastructure such as transportation pipe network, high degree of monopoly and control of natural gas prices. Rock gas exploration and development enterprises will face greater risks. Li Tie said that only on the basis of exploration, technology and infrastructure construction during the “Twelfth Five-Year Plan” period, shale gas is expected to be available during the “Thirteenth Five-Year Plan” period. Implement large-scale commercial development.

At present, China's shale gas exploration and development faces many problems. Although bidding has been carried out, the storage of shale gas resources in the block is not accurate enough. As China's domestic exploration and research on shale gas is still in its infancy, the nationwide shale gas resource survey and evaluation has not been systematically carried out, and information such as exploration wells and geological data is less. The reserve data is only established in 63 resource evaluation wells. Based on the exploration data, the accuracy is poor.

Moreover, in recent years, shale gas has been criticized in the United States for environmental pollution and waste of water resources. Shale gas mining requires a large amount of water for hydraulic fracturing. The fracturing fluid used in the mining process contains various chemicals. Agents, if not handled properly, can cause large-scale groundwater and surface water pollution accidents. China's shale gas mines are located in densely populated areas, and there are many in the northwestern regions where water resources are scarce. There is no clear constraint on how to avoid damage to the environment. In the future, once regulatory policies are tightened, more stringent environmental requirements will push up mining costs, and the United States has greatly reduced the economics of shale gas due to increased environmental protection expenditures in shale gas development in recent years.

For investors, the slow progress of pipeline construction in China and the high degree of monopoly are bottlenecks in the development of unconventional natural gas such as shale gas. The United States currently has more than 414,000 kilometers of pipelines. Natural gas transportation is convenient, the cost is low, and there are no barriers to access. As of the end of 2011, the total length of China's domestic natural gas pipeline was only about 48,000 kilometers, mainly controlled by enterprises such as China National Petroleum Corporation, Sinopec Group and CNOOC. The highly monopolized pipeline market will not be conducive to reducing the transportation cost of natural gas. The enterprise itself is also an important participant in the exploration and development of shale gas, and other companies cannot compete with it in terms of pipeline transportation.

The most critical issue is that domestic natural gas prices are regulated and cannot effectively stimulate shale gas exploration and mining enterprises. Li Tie said that domestic natural gas prices are strictly controlled and natural gas terminal prices are low, which cannot compensate for shale gas exploration. The higher cost in the early stage of development, and therefore the incentive effect on the company is limited.

In fact, companies investing in shale gas exploration and development in the early stage face many risks. “The investment in the early stage is large. The enterprise needs a large amount of capital investment in the exploration work in the early stage of shale gas. At present, 63 shale gas drilling is completed in China, the average straight well cost reaches 20,000 yuan/meter, and the horizontal well is 30,000 yuan/meter. A well of 2000-3000 meters deep will probably be invested 40 million to 100 million yuan. Although the cost of single well will gradually decrease as the scale expands, the initial drilling, infrastructure construction, transportation and other expenses will still be more There is a greater pressure on the company's cash strength." Li Tie said.

  Z P A

PRODUCT NAME: Zinc aluminum orthophosphate hydrate/Zinc Phosphate Dihydrate

PRODUCT TYPE: Anti-corrosion Pigment



CAS No.7779-90-0

PRODUCT APPLICATION: ZPA has a higher phosphate content than Zinc Phosphate.The absence of basic components in the pigment makes ZPA a versatile pigment for many applications.




Zinc as Zn%


Aluminum as Al%


Phosphorous as PO4%


Loss on ignition 600℃%


Pb   ppm


Cd   ppm


Oil absorption value [g/100g]


Sieve residue(on 32 microns,%)

Max 0.01


STANDARD PACKAGING  25kg/bag, Plastic-lined woven bag or Composite paper bag


Protect against weathering. Store in a dry place and avoid extreme fluctuations in temperature. Special conditions for opened packaging: Close bags after use to prevent the absorption of moisture and contamination

Zinc Phosphate Tetrahydrate

Zinc Phosphate Tetrahydrate,Phosphates Salt,Zinc Phosphate Dihydrate

shijiazhuang city xinsheng chemical co.,ltd ,