South China sea

China’s National Energy Administration (NEA) has announced that the country’s production from the South China Sea is projected to reach 15 billion cubic metres (bcm) of natural gas per annum out of a total offshore output of 20bcm by 2015.

Under China’s 2011-2015 five-year plan, which considers the South China Sea crucial to the country’s offshore gas exploration, the total gas production would be 176bcm by 2015, out of which conventional natural gas is expected to account for 138.5bcm, Reuters reports.

NEA anticipates that the proposed exploration during 2011-2015 would lay the foundations for the future large-scale development of shale gas between 2016 and 2020.

The projections have been made in view of the mounting annual gas consumption in the country, which is forecast to grow to 230bcm by the end of 2015, which would increase China’s reliance on foreign imports to about 35%, up from 15% in 2010.

"This will bring new challenges to the country’s energy security, and it must do its utmost to boost effective domestic supplies while at the same time optimising the natural gas consumption mix," said NEA, according to Reuters.

NEA has not provided any details of what parts of the South China Sea it would consider for the exploration in the next three years, triggering concerns about likely disputes with its neighbours over field claims.

The Philippines, Taiwan, Vietnam, Brunei and Malaysia are in disagreement with China with respect to several maritime claims on the sea, which is thought to have rich oil and natural gas reserves.

In November 2012, China’s offshore oil producer CNOOC discovered a large gas field in the Yinggehai basin of the South China Sea and started the evaluation process.

Image: Competing territorial claims in the South China Sea, where China plans aggressive gas exploration during the next three years. Image courtesy of Voice of America.