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Abstract The Ministry of Land and Resources is currently in the process of preparing for the third round of shale gas exploration bidding. Zhang Dawei, director of the Mineral Resources Reserve Evaluation Center under the ministry, recently launched the first session of the China Shale Gas Training and Consulting Center at Huayou Energy. The event, which took place yesterday morning, marked the official start of the training program.
In addition to this development, Tang Tingchuan, director of the Development Strategy Division at the Policy Research Office of China National Petroleum Corporation, shared an estimated timeline for the upcoming bid. According to him, the third round of shale gas bidding is expected to take place early next year.
Since 2011, the Ministry of Land and Resources has conducted two rounds of shale gas exploration bidding. The second round, which concluded at the end of 2012, sparked significant interest within the industry. It attracted participation from major state-owned oil companies, as well as private enterprises, local state-owned firms, and non-energy central enterprises.
However, despite the high level of interest, reports indicate that some successful bidders from the second round have not yet started their exploration activities, with a few even withdrawing from the sector altogether.
Industry experts point out that the high initial costs and long payback periods associated with shale gas extraction remain a challenge. Additionally, China's complex geological conditions—such as varied topography and underground structures—make exploration particularly difficult. Even large, well-funded companies have found it challenging to make progress, with some viewing the exploration rights as more of a burden than an opportunity.
As a result, there is growing concern about how many companies will participate in the third round, and whether foreign investment will be allowed.
Zhang Dawei expressed strong support for opening up the bidding process to foreign capital, though he noted that the decision on whether to include foreign players in the third round is still pending.
Furthermore, Zhang highlighted that by 2020, domestic natural gas consumption is projected to reach 380 billion cubic meters, while conventional natural gas production is expected to stand at 200 billion cubic meters. This would create a supply gap of 180 billion cubic meters. If shale gas production reaches 100 billion cubic meters by then, it could account for approximately 26% of total natural gas consumption, becoming a key component of China’s energy strategy.