China shale gas development
China shale gas developmentREUTERS

China has discovered a major shale gas block with a maximum daily output of 105,000 cubic metres in its southwest province of Guizhou, as the country looks to make use of modern technology to meet its rising energy needs.

The official Xinhua news agency, citing the Chinese Ministry of Land and Resources, said refiner Sinopec discovered the shale gas well located at a depth of 4,417 metres, the deepest so far in the country.

The ministry added that the discovery marks a major breakthrough in China's deep shale gas drilling.

The project is named Dingye-2HF and is situated in Xishui county of Guizhou province. It is expected to have an average daily output of 43,000 cubic metres, according to the ministry.

Another shale gas block that was located in Fuling District of southwest China's Chongqing Municipality, yielded an output of 150,000 cubic metres per day in 2010.

Increased Fracking and Rising Energy Demand

China is currently the world's fastest-growing major economy with annual gross domestic product growth rates averaging 10% for the last 30 years.

Energy demand in China has accelerated dramatically over the past few decades in line with the country's rapid industrialisation, making it one of the biggest manufacturing centres in the world.

China is expected to overtake the US as the world's largest oil consumer by 2027 and Russia as the world second-largest gas consumer by 2025, according to report by British oil giant BP.

Shale gas is natural gas found trapped within shale formations, and it has become an increasingly important source of energy across the globe. It is tapped using a most modern technique, known as fracking.

As a clean and efficient energy source, China is keen in making use of the new technology to ensure energy security and optimize energy structure. The country is investing more into shale gas and fracking research.

In 2013, China produced more than 2 million cubic meters of shale gas per day. By 2030, unconventional oil and gas production is expected to account for one-third of the country's total production.

According to a shale gas plan for 2011-2015, China aims to produce 6.5 billion cubic metres of shale gas annually by 2015.

China is the most promising country for shale growth outside North America, accounting for 13% of world shale gas growth, according to the BP report. Together, China and North America will account for 81% of shale gas by 2035, the report added.