China's Sinopec has begun production at a natural gas field that has an annual capacity estimated at 2 billion cubic meters.
The field, in the province of Sichuan, has reserves estimated at around 100 billion cubic meters, which makes it an important contributor to China's domestic natural gas output, Reuters reported, citing a statement by Sinopec.
It is also the company's third field with reserves of over 100 billion cubic meters, the statement said, putting Sinopec's total reserves in the Sichuan province at close to 3 trillion cubic meters. Annual output from these stands at some 26 billion cubic meters.
The West Sichuan field is a conventional reservoir but the province is also the focus of shale gas development.
Although China is estimated to have a high volume of shale gas resources, topping even those in the United States, its shale gas boom has not yet materialized because of some significant challenges.
Unlike in the United States, the development of shale gas resources in China is much more difficult due to more complex geography and a lack of adequate infrastructure in the remote mountainous regions where most of the Chinese shale resources lie.
Drilling for shale gas in China requires deeper wells, while fracturing is also tricky because of the mountain terrain and geological constraints. Yet Sinopec is pursuing exploration in shale formations in Sichuan and is reporting results.
The latest update came in January this year, when the state-owned company said it had struck oil and gas at an exploration well in Sichuan, estimating potential reserves at some 100 million metric tons.
The Sichuan province in southwestern China is estimated to hold a large part of China's shale gas resources. It was there that Sinopec discovered the Qijiang field last year, with reserves estimated at 146 billion cubic meters.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com More