Local govts may get shale gas licensing mandate soon

According to Wang, the cost for one shale gas drilling well is at least 100 million yuan ($16 million), and the central government's subsidy is 0.4 yuan for each cubic meter of output.

"The subsidy policy is based on output which means a company takes high financial risk if it starts test-well drilling and doesn't achieve any output," she said.

Shale gas faces a bumpy road en route to boom

China makes major deep shale gas discovery

The third round of bidding has been postponed twice. It was scheduled in late 2013 and 2014 spring afterwards.

The ministry had indicated that it would offer better blocks in the third round bidding, said Wang.

Reserves rise at Sinopec's Fuling block

The Ministry of Land and Resources said on Thursday that it certified 106.75 billion cubic meters of new proven geological reserves in the Fuling shale gas block in the southwestern municipality of Chongqing.

The move signifies the start of China's commercialized shale gas production, said China Petrochemical Corp (Sinopec Group) on its website.

Sinopec, the largest oil refiner in the country, is leading the shale gas industry in China.

As of June 30, Sinopec had produced 611 million cu m of shale gas from the Fuling block, according to the company.

In March, the company announced that the Fuling block would achieve output of more than 10 billion cu m by 2017.

Under China's 12th Five-Year Plan (2011-15) for the shale gas industry, the nation aims to reach total output of 6.5 billion cu m of shale gas annually by 2015.

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