State-run PetroChina intends to spend billions on ramping up natural gas production at Chongqing municipality over the next few years.
Subsidiary PetroChina Southwest has earmarked 54 billion yuan (US$8.06 billion) for exploration and production in Chongqing, which is part of the Sichuan Basin, in 2019-25. The company hopes to expand output to 10 bcm, of which shale gas will account for half. PetroChina produced 4.27 bcm of shale gas in Sichuan in 2018, below its target of 5.6 bcm.
The company said recently that it would focus exploration efforts on the Wubaitierpaijiao and Hebaochang blocks, with the goal of producing 300 mcm of gas from the two prospects in 2020.
In August 2018, PetroChina made a major shale gas discovery at the Huangguashan block in Chongqing’s Yongchuan District through a number of wildcat and appraisal wells. One horizontal well, Huang 202, flowed 223,700 cubic metres of shale gas after hydraulic fracturing. The well was drilled to a vertical depth of 4,084 metres, with a horizontal extension reaching 1,500 metres.
Yongchuan is believed to contain 600 bcm of shale gas reserves in an area covering 800 square km.
It is PetroChina’s first shale gas discovery more than 3,000 metres below the surface, a depth that was once considered too technically challenging to target.
PetroChina is seeking to learn from BP’s experience in exploiting shale gas reservoirs deeper than 3,500 metres. The UK-listed super-major has two production-sharing contracts (PSCs) with PetroChina to explore shale gas trapped in deep reservoirs in Sichuan’s Neijing-Dazhu and Rongchangbei blocks.
In the meantime, PetroChina Southwest will also invest 2 billion yuan (US$298.6 million) to build natural gas storage tanks in Chongqing to ensure sufficient supply during the peak shaving period.
Sichuan is home to about 38 tcm of gas reserves, of which 26 tcm is considered recoverable.