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**Abstract**
Domestic shale gas development is still in its early stages, with various policies currently under development. Yang Lei, a senior official from the National Energy Administration, revealed that the "Shale Gas Industry Policy" and the "Measures for the Management of Natural Gas Infrastructure Operations," both led by the administration, have been drafted and are awaiting final approval. These policies aim to address existing gaps in domestic regulations, improve infrastructure access, and create a clearer framework for shale gas development.
In addition to the Ministry of Land and Resources, which oversees mineral rights, the National Energy Administration is actively working on supporting policies for shale gas. Yang Lei disclosed this during the 2013 International Shale Gas Technology Exchange Conference, emphasizing that these measures will help resolve policy ambiguities and infrastructure challenges, paving the way for more efficient shale gas exploration and production.
**Mining Rights Will Be Resolved Within Six Months**
Currently, over 70% of domestic shale gas blocks overlap with traditional natural gas mineral rights, which has previously posed a major obstacle to shale gas development. Che Dongbo, deputy director of the Department of Geological Exploration at the Ministry of Land and Resources, stated that efforts to resolve overlapping tenements are progressing smoothly. In the previous year, 280,000 square kilometers of overlapping areas were reclaimed, and it's possible that some of these blocks may be re-licensed for shale gas exploration.
The second round of bidding in 2012 covered an area of 200,000 square kilometers, while the total reclaimed area reached 280,000 square kilometers. To manage overlapping mineral rights, the Ministry of Land and Resources issued Notice No. 159, which encourages shale gas exploration within oil and gas blocks. Oil and gas mining right holders can explore and exploit shale gas within their existing rights, provided they follow procedures for modifying or adding exploration and mining rights.
For blocks with potential for shale gas but not currently being explored, the ministry may conduct demonstrations and establish separate shale gas prospecting rights. Additionally, if a block is under-invested in conventional oil and gas exploration but holds potential for shale gas, the current prospecting rights holder should not be forced to withdraw. Those who have already conducted shale gas exploration must apply for changes to their mining rights or additional permits.
Major overlapping blocks are primarily held by China National Petroleum Corporation (CNPC) and Sinopec. Lei Huaiyu, head of the New Energy Division at CNPC, mentioned that Notice No. 159 mainly focuses on new shale gas mineral rights registration, which requires detailed verification by companies and could take time. However, he noted that CNPC expects to resolve the issue within six months.
Regarding the cost of recovered shale gas mineral rights, Lei Huaiyu explained that the fee for natural gas mining rights is 10,000 yuan per square kilometer, while shale gas is 30,000 yuan per square kilometer. The total investment of 40,000 yuan per square kilometer is considered manageable.
**Shale Gas Policy Is Intensive**
Shale gas exploration involves high risks and uncertain economic returns. The subsidy policy issued by the Ministry of Finance and the National Energy Administration is targeted at shale gas utilization, with strict conditions. There is no financial support during the exploration phase, meaning companies must bear the full risk themselves.
Despite these challenges, domestic shale gas is still in its infancy, and many policies are still being finalized. Yang Lei emphasized that the "Shale Gas Industry Policy" and the "Measures for the Management of Natural Gas Infrastructure Operations" are nearly complete and will soon be released. The industry policy will cover areas such as technological research, the establishment of demonstration zones, production targets, and foreign cooperation contracts.
According to public information, the collaboration model between CNPC and Shell has not yet been finalized. Yang Lei suggested that the most likely approach would be a sharing contract under the existing regulatory framework.
Furthermore, the "Measures for the Management of Natural Gas Infrastructure Operations" aims to address the issue of pipeline access, which is currently dominated by PetroChina and Sinopec. With limited pipeline infrastructure in newly emerging shale gas regions, access to pipelines is critical for gas transportation. This policy seeks to promote fair third-party access, encouraging more companies to participate in the shale gas sector.
Yang Lei added that the new measures will not overhaul the existing system but will provide clear guidelines for pipeline access, allowing all gas sources to connect. The pipeline operators will remain responsible only for transportation, not for the source of the gas.