Private companies to participate in shale gas bidding

The country's natural resources regulator will soon begin the second round of shale gas bidding, open to both State-owned and private players, a move that experts said Monday shows the nation's efforts to widen shale gas exploration to lower the retail energy prices and ease the country's heavy reliance on fossil fuels, a major air polluter.

The Ministry of Land and Resources will kick off the shale gas bidding on October 25.

This round of bidding offering 20 blocks will be different from the previous round in June when just four blocks were auctioned to only six State-owned oil and gas companies, including China National Offshore Oil Corp and Shaanxi Yanchang Petroleum Group.

Shoring up the country's shale gas exploration and output is among the recent string of government initiatives to develop the domestic shale gas sector,which lags behind other developed countries, Liu Enqiao, a senior energy analyst with Beijing-based Anbound Consulting, told the Global Times.

According to the recently released shale gas development plan, China aims to generate an annual output of 6.5 billion cubic meters by 2015.

Promoting shale gas development can be considered a key step by the government to ensure a good energy structure, which will not only help to replenish the energy supply and curb the retail fuel prices amid the country's energy shortfall, but also reduce the greenhouse gas emissions from fossil fuels, Lin Boqiang, director of the Center for Energy Economics Research at Xiamen University, told the Global Times.

China remains a large fossil fuel consumer with low gas consumption.

Although the country has set clear goals for the shale gas development, experts expressed concerns over the challenges the domestic shale gas developers might face, such as lack of funding and ecological risks in over-consumption of water.

According to the figures from the National Bureau of Statistics, domestic gas consumption only accounted for 4.6 percent of the country's overall energy consumption last year, much lower than the global average of 24 percent, while coal accounted for over 70 percent of the country's energy consumption.