OREANDA-NEWS. September 25, 2012. Details are beginning to emerge about the number of shale gas blocks that will be on offer in China’s long-awaited second round of auctions for exploration rights.

Officials with the Ministry of Land and Resources (MLR) have remained tight-lipped over the precise number of blocks available, but the MLR’s branch in Hunan Province announced on Tuesday that five blocks there will be put up for bidding when the round finally takes place.

The figure suggests Hunan will contribute the majority of blocks for the auction, as most experts expect the MLR to tender around 10 blocks in total. Hunan has in-place shale gas resources of seven trillion cubic meters (tcm), 4.81 tcm or nearly 70 percent of which lie in the northeast.

The MLR’s Hunan branch organized an industry meeting in Changsha City to brief local players on the upcoming tender, according to the announcement.

The meeting was attended by 29 companies and government departments, including the Hunan Coal Geological Bureau, China National Petroleum Corp. (CNPC), state-owned power producers China Huadian Corp. and China Huaneng Group, steelmaker Valin Group and Hunan’s Nuclear Industry Geological Bureau.

Hunan Provincial Shale Gas Development Co. Ltd., a joint venture (JV) established in August by Huadian, and Hunan Huasheng Energy Investment and Development Co. Ltd., formed by a Valin Group-led consortium in July, intend to bid for blocks in Hunan, Liu Bolin, an official with the National Energy Administration’s Hunan arm told Interfax.

A number of state-owned companies have also expressed interest in Hunan’s shale gas resources and are hoping to bid for blocks in the second round of auctions, Liu added.

Non-oil and gas companies joining the shale gas race face formidable challenges as development requires significant capital investment and advanced techniques, issues that also loom large for China’s majors, Bao Shujing, senior engineer at China Petrochemical Corp.’s Exploration & Production Research Institute, told Interfax last week.

Some prospective blocks in China lack comprehensive geological data for bidders due to the insufficient exploratory work conducted so far, Bao said.