Chongqing’s "Page 1 Well" has officially been sealed, following the completion of the well-sealing project. This information was confirmed by local officials in Chongqing on October 17. The well, known as "Zhangpu 1 Well," was a key milestone in the city's shale gas exploration efforts. Drilled on October 24, 2011, it made headlines in 2012 when it produced a continuous flow of 308 cubic meters of shale gas per hour during a test, marking a significant step toward commercial development.
However, recent reports suggest that the well is now closed due to financial constraints. Two industry insiders explained that the high costs associated with transporting and processing shale gas—such as building pipelines or liquefaction facilities—make continued operations challenging. They also noted that each horizontal well requires approximately 70 million yuan in investment, making sustained development difficult without additional funding.
According to these sources, the main challenge for Chongqing’s shale gas industry isn’t technological but policy-related. Although the government offers a subsidy of 4 yuan per cubic meter, it is seen as insufficient to cover the massive capital needs. Sinopec, which successfully developed the Jiaolin 1 Well in Fuling in 2013, confirmed that they have not yet received this subsidy, despite commercial success.
On the other hand, Li Dahua, dean of the Chongqing Institute of Geology, disputed the funding shortage claim. He explained that "Song 1 Well" was an evaluation well, and once all data was collected, it was temporarily sealed. He emphasized that this does not mean the well will never be used again.
Chongqing’s shale gas sector has long faced financial challenges. In early 2024, Chongqing Energy Group partnered with Huaneng Power International through a capital restructuring, allowing Huaneng to acquire a 65% stake. While the company stated this move was aimed at strengthening technical capabilities and risk control, some analysts believe it may affect local control over shale gas resources, hinting at underlying financial pressures.
Huaneng Power will focus on the Xiangyang East Block, while Chongqing Energy Group will concentrate on exploring the Qianjiang area. In August 2012, Chongqing set ambitious goals to become a national hub for shale gas development, aiming to address energy shortages driven by rapid economic growth.
With proven reserves of 12.75 trillion cubic meters and estimated recoverable resources of 2.5–3 trillion cubic meters, Chongqing holds a significant share of China’s total shale gas potential. Despite this, the region remains a net importer of electricity and coal, with 30% of its energy currently sourced externally. As demand grows, the gap between supply and consumption continues to widen.
Experts like Cheng Peng from Conil China Enterprise Management Consulting suggest that national support for shale gas should prioritize both economic returns and energy security. With high initial costs, direct subsidies could help reduce operational expenses and encourage further development.
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