OREANDA-NEWS. October 03, 2014. By the end of July, China had tapped 500 billion cubic metres (bcm) of proven, probable and possible shale gas reserves, with the bulk of the work done by the country's top two energy firms, according to the Ministry of Land and Resources (MLR).

The ministry, the main government agency behind the shale gas push, said China could pump 40-60 bcm of shale gas by 2020, or one-fifth of the country's total natural gas output, "if proper measures are taken".

That is more optimistic than the National Energy Administration, with a goal of 30 bcm.

Companies have spent 20 billion yuan (USD3.26 billion) and drilled 400 wells, with breakthroughs made mostly in Sichuan basin in the southwest and Ordos basin in the north, the ministry said in its in-house newspaper.

China, believed to hold the world's largest resources of shale gas, hopes to replicate the production success of the United States but faces huge technological and environmental challenges due to its more complex geology and scarce water.

The government, led by the MLR, wants to broaden competition in the sector and has held two shale gas auctions, but so far 90 percent of the tapped reserves are from Sinopec Corp and PetroChina.