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China offers subsidies for shale gas exploration

(Xinhua) Updated: 2012-11-06 09:18

BEIJING - China will allocate targeted funds from its central budget to subsidize shale gas exploration as part of its efforts optimize the country's energy structure.

The Ministry of Finance announced Monday in an online statement that a subsidy of 0.4 yuan ($6.3 cents) will be offered for every cubic meter of shale gas developed by enterprises during the 2012-2015 period.

Local governments may introduce separate incentives according to regional needs, the statement said.

Shale gas, an unconventional source of natural gas, has gathered steam in China amid the government's efforts to promote the use of clean energy.

In a recent auction, 83 companies bid on exploration rights for 20 shale gas blocks, according to the Ministry of Land and Resources.

China has rich reserves of shale gas, but expensive exploration costs and sophisticated technological requirements have substantially restrained the sector's growth.

Earlier media reports said China aims to pump 6.5 billion cubic meters of shale gas by 2015, with the commercialization of shale gas production expected to occur during the 13th Five-Year Plan period (2016-2020).

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