Sinopec (China Petroleum & Chemical Corporation) has proved another 34.029 billion cubic meters of natural gas at the Zhongjiang Gas Field, bringing the total known natural gas reserves in the Sichuan Basin to 106.1 billion cubic meters.

The Zhongjiang Gas Field (Zhongjiang County of Deyang City) main gas reservoir has a depth of 2,000-3,000 meters and covers an area of 404.9 square kilometers. The gas field is a typical compact sandstone gas reservoir characterized by low porosity, low permeability and strong concealment.

Developed through R&D, Sinopec’s integrated evaluation and key supporting technologies strongly buttress the high-quality exploration of Zhongjiang Gas Field, which has a cumulative gas production of 5.29 billion cubic meters with annual production exceeding 1 billion cubic meters for two consecutive years—the equivalent to meeting the daily gas consumption of 5.5 million households every year.

The Sichuan Basin is rich in ultra-deep natural gas and deep shale gas resources and is a main front for increasing natural gas reserves and production in the future. In recent years, Sinopec Southwest Oil & Gas Company has successively solved three major problems in oil and gas exploration and development, including narrow-channel tight gas fields; ultra-deep and high-sulfur gas fields; and deep shale gas fields.

It has made China one of the few countries in the world to own the complete exploration and development technologies of ultra-deep, high-sulfur organic reef gas fields, taking the lead in ultra-deep natural gas and deep shale gas exploration and development.

Background. China’s natural gas production has been steadily rising during the past several years as the country tries to fill the growing need for natural gas, according to the US Energy Information Administration (EIA). China’s NOCs produced an estimated 6.3 trillion cubic feet (Tcf) of natural gas in 2019, 8% higher than in 2018.

Although still in its early phase, China’s shale gas production rose substantially by 14% from 2017 levels to about 365 billion cubic feet (Bcf) in 2018.

China’s 13^th Five-Year Plan targets natural gas production to reach 6 Tcf for conventional gas, 1.1 Tcf for shale gas, and less than 0.6 Tcf for coalbed methane by 2020.

To promote domestic upstream development of unconventional natural gas, China introduced financial incentives for producers. The government reduced the resource tax on shale gas production from 6% to 4.2% starting in April 2018 through March 2021. In addition, China extended subsidies on all unconventional production through 2023 and, for the first time, included tight gas (low-permeability natural gas found in reservoir rocks) as an unconventional natural gas source eligible to receive subsidies.

China’s NOCs accelerated their investments in upstream natural gas developments to respond to the government’s call in 2018 to ease future natural gas shortages and to make China more self-sufficient in natural gas resources.

China’s offshore natural gas production increased 10.5% from 2018 to 335 Bcf in 2019, mostly from growth in the South China Sea. CNOOC, China’s major offshore producer, plans to commission the country’s second deepwater natural gas field, Lingshui 17-2, and the newly explored large Bozhong 19-4 natural gas and condensate field in the Bohai Bay in northeastern China by 2022.

Resources

• Shengxiang Long, Zhe Cheng, Huaming Xu, Qian Chen (2020) “Exploration domains and technological breakthrough directions of natural gas in SINOPEC exploratory areas, Sichuan Basin, China,” Journal of Natural Gas Geoscience, Volume 5, Issue 6, doi: 10.1016/j.jnggs.2020.10.002 (Open Access)