In response to growing energy demands and heightened concerns over the environmental impacts of coal-fired power generation, the Chinese government has amped up its development of its natural gas supply, including its domestic gas reserves. China’s shale gas resources are potentially the world’s largest, with total recoverable reserves estimated at 25-36 trillion cubic meters. In March of 2012, the National Energy Administration (NEA) unveiled an ambitious plan to produce 6.5 billion cubic meters of shale gas by 2015, accelerating to 60-100 billion cubic meters per year by 2020.

These announcements came several months after the State Council approved a petition filed by the Ministry of Land and Resources (MLR) to designate shale gas independent from conventional hydrocarbons in an effort to remove the legal roadblocks that limited shale exploration rights to China’s major State owned oil and gas companies. The approval of this petition in December 2011, together with the release of the Twelfth Five Year Plan for Shale Gas Development in March 2012, has raised expectations for the industry.