Between 2008 and 2035 the global gas demand could grow by 60%, and individual countries like China and India will see a 5 to 8 fold increase over this period. Conventional gas resources will not be sufficient to cover this demand; hence there is an intense focus on unconventionals such as Tight Gas, Shale Gas, Liquid Rich Shales or Coal Bed Methane globally and in China.

Based on the successful development of the Changbei gas field that was ramped up to plateau production in time to deliver gas to the Beijing Olympics in 2008, China Shell Exploration and Production Company (SCEPCo) is pursuing unconventional projects in China. Common challenges to these projects are producibility, increasing EUR/well, reducing cost, fraccability of the target horizons and non-technical risks.

The focus on Unconventionals and its requirement for hydraulic fraccing has resulted in controversy and debate across the globe. For Shell, transferring and adapting the learnings gained from 10 years of successful operations in the Americas to China is vital. As a company we do not only focus on technology and cost but of particular importance is minimising the impact we have on people, safety and environment. For this reason Shell has published a set of principles to underpin the Unconventional operations.

This paper describes the technical- and non-technical challenges that the unconventional projects face in China and how knowledge transfer has been achieved from North America. Another specific aspect that will be covered is how to create successful unconventional developments under a PSC (Production Sharing Contract) framework that was designed for conventional projects.

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