Environmental Engineering Reference
In-Depth Information
output of 200 million cubic metres. The following are the details of the
supportive policies:
(1) To encourage Sino-foreign joint ventures in shale gas exploration
and development in China. Foreign entities with advanced shale
gas-related technologies are encouraged to partner with Chinese
enterprises. In co-exploration, foreign companies provide advanced
technologies and equipment for a fee. Several foreign oil and gas
enterprises, e.g. Shell, Chevron, ConocoPhillips, ExxonMobil, Total,
etc., have already signed joint research agreements with Chinese
partners. In March 2013, a shale gas production sharing agreement
(PSA) between Shell and China National Petroleum Corporation
(CNPC) was approved by the Chinese government, which is the first
Sino-foreign PSA approved in China's shale gas industry.
(2) To encourage private and small companies with capital and flexible
plans, since the shale gas boom and technology innovation in the US
was led by small and medium-sized independent companies.
(3) To provide new financial incentives and government support.
According to the recent policy, tax incentives for the shale gas in-
dustry will borrow from the coal-bed methane (CBM) policy. The
government will subsidise 0.4 CNY (Chinese currency: renminbi) per
cubic metre for shale gas production from 2012 to 2015. This is twice
as much as the current subsidy for CBM production. In addition, the
local government may provide shale gas development and utilisation
with appropriate subsidies according to the actual situation as it
progresses. Also, the shale gas enterprises will get a waiver or re-
duction in license fees, mineral resources compensation fees, an ex-
emption from value added taxes and an exemption from customs
tariffs for equipment imported for shale gas exploration and devel-
opment projects. For example, the government subsidised the Petro-
China-Southwest subsidiary with 4.08 million CNY for 10.2 million
cubic metres shale gas produced from four wells in the Weiyuan and
Changning areas in the Sichuan Basin. At the same time, the National
Development and Reform Commission (NDRC) and the National En-
ergy Administration (NEA) have approved several shale gas pilot de-
velopment areas (mostly within or around the Sichuan Basin). In these
pilot areas, the Chinese government will facilitate the construction of
supporting facilities and encourage joint collaboration of shale gas
participants, technology integration, etc.
(4) To improve land and market access.
When reviewing an application for a land-use permit, a shale-gas
developer will be given priority based on the National Development
and Reform Commission's policy 2012.
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Since China's existing gas
pipeline network is monopolised mainly by CNPC and partially by
Sinopec and is thus inaccessible to other companies, this has been a
barrier to the development of shale gas. Accordingly, the new shale gas
