Progress, Challenges, and Strategies for China’s Natural Gas Industry Under Carbon-Neutrality Goals

Abstract

In recent years, the Chinese government has introduced a series of energy-saving, emission-reducing, and environmentally protective policies. These policies have gradually decreased the proportion of high carbon-emitting energy consumption, such as coal, in China’s energy structure. The proportion of natural gas consumption as a clean energy source has been increasing year by year. In the future, with the deepening decarbonization of the energy structure, the applied scope of natural gas utilization will expand, increasing demand. Therefore, this study first evaluated the development of China’s natural gas industry from the perspectives of development evolution, technological applications, and industry achievements. Secondly, based on the current situation of conventional and unconventional natural gas development, both resources and technological potential were analyzed. By taking several typical projects in the natural gas industry as examples, medium- and long-term prospects for natural gas development were planned and predicted. Building on this analysis, we employed the SWOT method to examine the development prospects of China’s natural gas industry and propose development goals. Finally, based on top-level design considerations and previous research analysis, suggestions and measures were proposed for technology implementation, regional layout, industrial chain collaboration, and support policies. These recommendations aim to provide planning support and management references for the development of China’s natural gas industry.

1. Introduction

The Chinese government has put forward the goal of “reaching peak carbon dioxide emissions by 2030 and realizing carbon neutrality by 2060” (carbon peaking and carbon neutrality goals, which are referred to as the dual-carbon goals) [1,2,3,4,5]. Carbon emissions associated with the energy industry are mainly derived from coal, oil, natural gas, biomass, etc. [1,2,3]. Carbon sinks, including absorption by forests, can be equally balanced with carbon capture, utilization, and storage to achieve carbon neutrality [1,3,6,7].

Since 1921, global natural gas production has risen from 20 billion cubic meters to 4.08 trillion cubic meters in 2023 (Table S1, [1,2,3,4,5]). From 1921 to 1950, the U.S. produced 90% of the world’s natural gas. Production expanded to Europe, the former Soviet Union, the Middle East, and North Africa from 1951 to 1970 (Table S1, [1,3]). Between 1971 and 2005, five major production regions emerged: North America, Russia, the Middle East, Asia-Pacific, and Africa. Post-2006, global natural gas production grew rapidly (Table S1, [6,7]). The experiences of European and American countries have shown that natural gas is the priority choice in terms of energy saving and emissions reductions, as well as energy transition [3,5,8]. The United States has vigorously implemented a strategy of “replacing coal with gas” [9,10]. Natural gas consumption increased from 23% to 31% from 2005 to 2019, while renewable energy consumption increased from 1% to 5% [1]. As a result, carbon dioxide emissions have decreased significantly, with global CO₂ emissions per unit of GDP dropping by 18.1% from 2000 to 2019, peaking in 2007 [1,4,11]. Previous investigations have indicated that the new dual-carbon goals will accelerate the low-carbon energy transition, change the development mode of the energy industry [10], and promote sustainable, high-quality growth in the natural gas sector, leading to reduced emissions [5,11,12]. In addition to the advantages of cleanliness and high efficiency, natural gas also has the advantages of strong peak shifting abilities, stable and reliable power generation, and up to 90% availability in terms of time, which can fully make up for the intermittent and variable nature of renewable energy sources, such as wind and solar energy. It is the most realistic choice to realize “cleaner and decarbonization” energy structures [1,2,3,4,5,13,14,15]. These attributes effectively compensate for the intermittent and variable nature of renewable energy sources like wind and solar, making natural gas the most practical choice for achieving cleaner and decarbonized energy structures [13,14,15]. Therefore, natural gas will continue to play a crucial role in ensuring energy security and supporting structural transformation, making it the primary choice in the low-carbon development of fossil energy [9,10,11,12,13]. At present, China’s natural gas industry has entered a new stage of leapfrog development. In the 21st century, it has become the fourth-largest gas producer in the world [1]. Against the backdrop of a complex geopolitical environment, considering the security of the energy supply, the goal of carbon peaking, and the vision of carbon neutrality, the development of China’s natural gas industry will be unprecedented in terms of development space and opportunities [1,3,14]. In order to form a comprehensive understanding of China’s natural gas industry concerning the above objectives, recent research results provided by relevant scholars are summarized. We also discuss the prospects for the development of China’s natural gas industry in the context of “carbon neutrality” [15].

Zou summarized the history and achievements of China’s natural gas industry, analyzed its current status and challenges involved in transitioning to green and low-carbon energy, and proposed a development strategy for the industry [1]. Jian reviewed the history, current status, trends, and issues of China’s natural gas industry; analyzed the prospects from supply and demand perspectives; and proposed reasonable and sustainable strategic measures and suggestions [16]. Gao collected, organized, and analyzed the indicators, data, and dynamics of China’s natural gas industry in 2023 in order to help the industry’s high-quality development and encourage Chinese-style modernization [17]. Sun analyzed the natural gas industry chain using industrial organization and market system theories [18]. He reviewed market structure, institutional rules, and regulations; identified key issues; and proposed optimization strategies [18]. Zhou considered the changes in the development environment and supply and demand situation in the process of energy transition and clarified the business focus and development path in China’s natural gas industrial chain [15]. Dong compared the natural gas markets in the U.S. and China from 2000 to 2015. Their study revealed increased development in the natural gas supply chain and proposed countermeasures for future development in both countries [19]. Dai compared China with major global gas producers, analyzing China’s natural gas resources, production growth, and remaining recoverable reserves [20]. Their analysis predicts that China’s annual natural gas production will reach 250 × 10⁹ m³ by 2025 [20]. Jin analyzed the development positioning and potential of the natural gas industry based on the results of natural gas demand forecasts by different domestic and international organizations [21].

Most scholars have only analyzed and researched a certain link in China’s natural gas industry chain and the supply and demand situation under the background of “carbon neutrality” [1,2,3,4,5,6,7,8,9,10,11,12,13,14,15]. However, there is a lack of summarized analysis of the latest achievements in China’s natural gas industry in the context of “carbon neutrality”. This cannot provide guidance for the subsequent sustainable development of the natural gas industry. To this end, this article reviews and evaluates the latest developments, important theories, key technologies, and key achievements in upstream exploration and development through interdisciplinary tracking research and comprehensive elaboration. It focuses on analyzing the exploration and development situation in China’s natural gas industry, the size of the production capacity potential, and the synergistic effect of the whole industrial chain, including the production–supply–storage–marketing system. This is of great significance in terms of improving our understanding of China’s natural gas industry and is conducive to further promoting the energy substitution of natural gas in energy reform.

The specific contribution of this paper is to summarize the development highlights of China’s natural gas industry and analyze the supply potential of China’s natural gas industry so as to be able to judge China’s natural gas development prospects and targets in the context of peak carbon and carbon-neutral strategies. It provides decision making support for government departments and industry organizations to formulate policies and standards, which is of comparatively important theoretical and practical significance.

2. Current Status of China’s Natural Gas Industry

2.1. General Development and Evolution of the Organization

Divided in terms of annual production and accumulated proven reserves, the development of China’s natural gas industry can be roughly divided into three stages [1]:

The initial stage lasted for 28 years (1949–1977) [1,4,22]. China’s natural gas industry was initially developed in the Sichuan Basin, primarily by the China National Petroleum Corporation (hereinafter referred to as PetroChina), which is engaged in exploration, development, and industrial production. The output gradually increased from 0.1 × 10⁸ m³ to 100 × 10⁸ m³, with proven nationwide geological reserves of less than 2000 × 10⁸ m³ [5,23,24].

The second stage was the slow growth stage (1978–2000) [1,4,22]. In these 22 years, China’s annual natural gas production steadily increased to 303 × 10⁸ m³, and the total proven geological reserves of natural gas amounted to 3.4 × 10¹² m³, mainly consisting of dissolved gas and gas reservoirs produced by PetroChina [4]. China National Offshore Oil Corporation (CNOOC) was established in February 1982 [25]. In July 1998, China National Petroleum and Chemical Corporation Limited was established as a wholly state-owned holding company [5]. After that, some provincial enterprises, central enterprises, and other private small- and medium-sized enterprises were established, e.g., Shaanxi Yanchang Petroleum (Group) Co., Ltd. (Yanchang Petroleum) and Sinochem Petroleum Exploration and Development Co., Ltd. (Sinochem Petroleum), jointly participating in the exploration, development, and production of natural gas [24].

The third stage was the rapid growth stage (2001–2022) [1,4,22]. The annual average natural gas production growth was 83.4 × 10⁸ m³ in these 21 years, reaching 2200 × 10⁸ m³ in 2022 [1]. The cumulative proven reserves amounted to 19.61 × 10¹² m³. The annual increase was ~100-fold in the past seven years, with an average growth rate of ~10% [4]. PetroChina, Sinopec, and CNOOC developed rapidly during this stage, while other oil companies developed in parallel (Figure 1, [1,4,24]).

2.2. Technology Innovation Research and Application Analysis

As for conventional natural gas, structural zones with similar deformation mechanisms and accumulation conditions in foreland thrust belts (e.g., the Kelasu structure in the Kuqa Depression of the Tarim Basin and the Yingxiongling structure in the Chaixi foreland of the Qaidam Basin), which control the distribution of structural gas fields, have been proposed to effectively seek structural traps in deep basins and to enhance reserves in foreland basins [26,27]. Moreover, it has been accepted that uplifts within cratons control the distributions of large-scale gas fields, platform edges control the zonal distribution of reefs and shoals, and passive continental edges control the development and distribution of large-scale deep-water gas fields [28,29,30]. Theories, such as those concerning the development mechanisms of large-scale reservoirs in ancient carbonate rocks and the control of oil and gas accumulation by superimposed ancient and modern structures, have been proposed [31]. These also include reservoirs developing across key tectonic periods and models with four "ancient" factors: source rock distribution by ancient rifts, beach reservoirs on ancient platforms, the preservation of large gas fields in ancient traps, and in situ oil cracking in ancient reservoirs [16,17,18,19,20]. These theories aim to guide the discovery and exploration of large gas fields, such as the Anyue Gas Field.

In terms of unconventional gas exploration, deep-water shelf deposition models have been established to reveal the origins of organic-rich shale [25]. Mechanisms of organic pore development and shale gas release were proposed, where the optimal thermal maturity for successive gas generation and shale gas exploration was 1.35–3.5% [29]. Well-developed nanopore throat systems with diameters of 5–200 nm could be found in black shale reservoirs, while gas could only fill pores with size > 5 nm, surpassing the pore size threshold in classical theory and expanding our understanding of storage space in relation to the occurrence of gas [31,32,33]. Primary controllers of continuous oil and gas accumulation and “sweet spots (units)” were proposed, and exploration strategies for “sweet spots” have also been forwarded, after which Ordovician Wufeng–Silurian Longmaxi shale in the Southern Sichuan Basin was identified through gas enrichment intervals [25]. It had a silicon-rich and calcareous-rich paleontology, e.g., graptolite and algae. Shale gas was primarily produced from intervals with a thickness of 20–40 m, where abundant beddings and microfractures could be observed, and horizontal permeability was significantly high (Figure 2; [13,14,15,16,17,28]). Five “sweet spots” were identified, with a potential area of 2 × 10⁴ km² and recoverable resources of 10 × 10¹² m³, and national shale gas demonstration zones were built, e.g., Weiyuan, Changning, Zhaotong, and Fuling [30,32,33]. A national standard has been issued for geological shale gas evaluation methods, guiding theoretical and technological advancements relating to unconventional oil and gas resources while also promoting their strategic development [30,31,32,33,34].

Since the 13th Five-Year Plan, geophysical technologies have been extensively developed and applied, significantly enhancing the natural gas industry [34]. Advanced seismic acquisition techniques (broadband, wide azimuth, and high density) for complex surface and underground structures, along with low-frequency vibrations and structural imaging, have improved imaging and reservoir prediction accuracy [35,36,37,38]. This has greatly supported the exploration and development of natural gas, notably in the Keshen and Kelasu structures in the Kuqa Depression and Central Sichuan Basin [39,40,41]. Drilling technologies for complex lithologies and deep gas reservoirs have advanced, significantly reducing drilling periods (e.g., from 387 to ~300 days in the Kuqa foreland thrust belt and from 301 to 175 days in the Gaomo structure) while also extending horizontal section lengths [42]. Enhanced log interpretation technologies for complex lithology, tight reservoirs, and shale gas reservoirs have increased interpretation accuracy by 5–10% compared to the 12th Five-Year Plan [34,43]. The development of multi-dimensional imaging log technologies and CIFLog 2.0 software has formed the basis of core technologies used in over 80% of CNPC’s oilfields [44]. Geophysical methods have greatly improved imaging and reservoir prediction accuracy, which are crucial for identifying and exploiting unconventional “sweet spots” [39,40,41]. Effective fracturing technologies for unconventional reservoirs, such as those in the Kuqa Depression and Central Sichuan Basin, have led to significant breakthroughs [39,40,41,42]. Volumetric fracturing technologies for horizontal wells have increased individual well production by more than threefold and some by more than fivefold [41,42,45].

2.3. Analysis of the Evaluation of Industry Development Results

With theoretical innovation and technological breakthroughs, China’s natural gas industry has accomplished the following eight achievements since the 13th Five-Year Plan.

2.3.1. Exploration and Development Areas

Recently, conventional gas exploration and development focusing on foreland thrust belts, marine carbonate rocks, deep and ultra-deep reservoirs, the “four new” domains, etc., have achieved considerable major discoveries and breakthroughs, promoting gas reserves and production [26,31,46,47]. Unconventional gas (shale gas, tight gas, and coalbed methane (CBM)) exploration and development, mainly focused on shale gas, coalbed methane, and tight gas, achieved rapid increases in terms of reserves and production and establishing a strong position for subsequent development [48,49,50,51,52,53]. At present, natural gas exploration and development have been continuously expanded, leading to diverse gas reservoir types being made available and doubling the resource potential [4,23,24], for example, from structural reservoirs to lithologic reservoirs and from single-carbonate reservoirs to conventional clastic reservoirs, loose sandstone reservoirs, low-permeability tight reservoirs, volcanic reservoirs, shale gas, and coal gas [54,55]. The targets have expanded from shallow reservoirs to deep and ultra-deep reservoirs, transforming from conventional natural gas to both conventional and unconventional gas [23,47].

The natural gas industry has expanded from regions predominately located in the Sichuan Basin to nationwide, including Shaanxi Province, Gansu Province, Xinjiang Province, Qinghai Province, Yunnan Province, and three provinces in East and North China [1]. Since the first national oil and gas resource assessment in 1986, natural gas resources have increased by 10 × 10¹² m³ every 10 years (Figure 2, [6,7]).

With breakthroughs in unconventional gas, the latest oil and gas resource assessment suggests that the total recoverable conventional and unconventional gas resources in China have increased to 111.5 × 10¹² m³ [1].

2.3.2. Proven Reserves and Capacity of Natural Gas

China’s natural gas exploration is based on strategic, global, and forward-looking objectives, highlighting the utilization of new fields, new zones, new layers, and new types, with remarkable exploration results [1,4,5]. For 19 consecutive years, China’s new geological reserves of natural gas have exceeded 5000 × 10⁸ m³, and the cumulative geological reserves of natural gas in three basins, namely, Sichuan, Ordos, and Tarim, have exceeded 2 × 10¹² m³, while the cumulative geological reserves of natural gas in the basins of Songliao, Qaidam, East China Sea, Bohai Bay, Qiongnangdong, Ingekai, Junggar, and Zhujiangkou, as well as the Bohai Sea, have exceeded 1000 × 10⁸ m³, laying the foundation for the rapid growth of natural gas production and resources [49,56,57]. Proven natural gas reserves have provided a resource base for the rapid development of the natural gas industry and capacity enhancement.

The proven natural gas reserves in China increased by 49,880 × 10⁸ m³ during the 13th Five-Year Plan, surpassing its goal for natural gas development (40,000 × 10⁸ m³) by 9880 × 10⁸ m³ ([1], Figure 2). Specifically, conventional gas reserves were over 4320 × 10⁸ m³, shale gas reserves were higher than 5660 × 10⁸ m³, and the proven natural gas reserves continue to grow at a high speed [3] (Figure 2).

By the end of 2023, the three major basins formed five domains of proven geological reserves, with a potential development scale of 1 × 10¹² m³ (Figure 2, [3,4,5,6,7,8]):

(1)

The Sulige gas reserves in the Ordos Basin are a potential domain, with total proven geological reserves of 2.07 × 10¹² m³ [49].

(2)

Sichuan–Chongqing shale gas reserves in the Sichuan Basin are also a potential domain, with accumulated proven geological reserves of up to 2 × 10¹² m³ [47].

(3)

Large gas reservoirs in deep and ultra-deep basins in the Kelasu structural belt, Kuqa Depression, and Tarim Basin have total proven geological reserves of 1.5 × 10¹² m³ [42].

(4)

Deep-buried carbonate gas reservoirs in the Anyue Gas Field of the Sichuan Basin have proven geological reserves of 1.3 × 10¹² m³ [29].

(5)

Cambrian and Permian deep shale gas in the Sichuan Basin is expected to show increased potential reserves, with proven geological reserves of 1.0 × 10¹² m³ [25,49,58].

In terms of China’s overall natural gas production capacity, annual natural gas production from 2020 to 2022 grew from 1925 × 10⁸ m³ to 2200 × 10⁸ m³, a growth rate of 14.3% (Figure 2, [4,9,10,11,12,13,14,15,16,17]). On the one hand, this may indicate that China’s natural gas production capacity may now be less disturbed by the novel coronavirus pandemic. On the other hand, this progress also reflects China’s innovation and development in terms of natural gas production technology.

In 2020, CNPC’s natural gas production equivalent amounted to 1.04 × 10⁸ t oil equivalent, a record annual net increase in natural gas and the first time it exceeded oil [6,10,14,18,19,20]. In 2022, the company’s natural gas production amounted to 1454 × 10⁸ m³, or 1.16 × 10⁸ t in terms of oil equivalence, accounting for 66% of the country’s total output. This is a net increase of 7.6 billion cubic meters from 2021, another record high [20,21,22,23,24,25]. In addition, CNPC built three natural gas production bases with an annual production capacity of more than 300 × 10⁸ m³, namely, the Ordos Basin (493 × 10⁸ m³), the Sichuan Basin (383 × 10⁸ m³), and the Tarim Basin (323 × 10⁸ m³) (Figure 3, [25]). As the company’s oil and gas production structure has been further optimized, significant progress has been made in the transition to green and low-carbon energy sources [2,17,26,27].

Natural gas production in China reached 2300 × 10⁸ m³ in 2023, with the average annual yield increasing by 100 × 10⁸ m³ for 8 consecutive years [28,29]. Three major gas regions—the Sichuan Basin, Ordos Basin, and Tarim Basin—were the main contributors to this increase in production [12,30]. Since 2018, the increase in production has accounted for 70% of the total value in China [31,32,33,34].

2.3.3. Rapid Development of Unconventional Gas Exploration

During the “13th Five-Year Plan”, the exploitation of unconventional natural gas made great progress and became the main force in natural gas production [1,4,17]. About 70% of China’s average annual new production capacity relates to unconventional natural gas [4,17]. This has pushed China into a new stage that involves the parallel development of conventional and unconventional natural gas.

Unconventional gas production in China increased from 756.8 × 10⁸ m³ to 840 × 10⁸ m³ from 2020 to 2022, with its proportion in terms of total gas production increasing from 38% to 39.3% (Figure 4, [1,4,17]). The proportion of shale gas production in total natural gas production increased from 8.3% to 10.6%, while its increased production accounted for 37.0% of the total increase, becoming the primary motivator of gas production increases. Statistics relating to natural gas production by type are shown in Figure 4. In this figure, it can be seen that the average annual growth rate of CNPC’s conventional gas production was 7.3% from 2000 to 2022, 26.7% for tight gas production from 2004 to 2022, 570% for shale gas production from 2012 to 2022, and 43.8% for coalbed methane production from 2009 to 2022. In 2022, CNPC’s non-conventional natural gas production amounted to 60 billion cubic meters, accounting for 41.3% of total natural gas production. Here, the parallel development of conventional and unconventional natural gas can be further elucidated.

Unconventional gas production in China exceeded 960 × 10⁸ m³ in 2023, accounting for 43% of total gas production, playing an important role in terms of increasing gas reserves and production [1,4,17,23]. Among them, tight gas was mainly yielded from the Ordos Basin and the Sichuan Basin, with output increasing steadily and an annual output of over 600 × 10⁸ m³ [1,17]. Shale gas reservoirs have been discovered from new plays and new intervals, e.g., instances of producers involving middle–deep intervals have been continuously enhanced, and commercial gas has been continually drilled from reservoirs in deep basins, with an annual output of 250 × 10⁸ m³ [30,47]. CBM exploration and development at shallow–middle intervals have steadily increased, and major breakthroughs have also been achieved in deep basins, with annual CBM production reaching 110 × 10⁸ m³ [57,59,60].

2.3.4. Interconnection of Production, Transportation, Storage, and Marketing

The construction of underground gas storage (hereinafter referred to as gas storage) and LNG terminals has also accelerated, continuously enhancing the peak-shaving capacity and improving the domestic gas production–transportation–storage–marketing system [61,62]. By the end of 2022, 24 LNG terminals had been built in China, with a receiving capacity of 9130 × 10⁴ t/y and an annual capacity of 300 × 10⁴ t [61,63]. Twenty-four gas storage areas had also developed, with a designed total working gas volume of 274.6 × 10⁸ m³ and a peak-shaving capacity of 192.4 × 10⁸ m³, accounting for 5.2% of the national gas consumption (3680 × 10⁸ m³) [61,63]. The gas-storage capacity of PetroChina was 79 × 10⁸ m³, accounting for 41% of the total value [62,64,65].

3. Supply Potential Analysis of China’s Natural Gas Industry

3.1. Resource Potential

The latest resource evaluations show that China is rich in natural gas resources, representing a solid resource foundation for long-term and rapid development [20]. Currently, the total natural gas resources amount to 247.4 × 10¹² m³, including onshore conventional gas, 59.7 × 10¹² m³; offshore conventional gas, 23.2 × 10¹² m³; tight gas, 30.7 × 10¹² m³; shale gas, 105.7 × 10¹² m³; and coalbed methane, 28.1 × 10¹² m³ [5,17,24]. Generally, these resources are in the early and middle stages of exploration, with great potential for increasing reserves in the future.

3.1.1. Resource Distribution and Types

Concerning the distribution of natural gas resources, there is a resource foundation to accelerate development. Total onshore natural gas resources amount to 224.2 × 10¹² m³, mainly distributed in the Sichuan Basin, Ordos Basin, and Tarim Basin, accounting for 60% of the total [1,15,21,22]. The total offshore natural gas resources amount to 23.2 × 10¹² m³ and are mainly distributed in the East China Sea and Qiongdongnan Basin, accounting for 56% of the total [5,20,24].

In terms of gas resource types, conventional natural gas resources amount to 82.9 × 10¹² m³, accounting for 33.5% of the total gas resources, while unconventional natural gas resources amount to 164.5 × 10¹² m³, accounting for 66.5%, i.e., almost twice that of conventional natural gas [1,15,21,22]. Among unconventional gas resources, tight gas is mainly distributed in the Sichuan Basin and the Ordos Basin, shale gas is mainly distributed in and around the Sichuan Basin, and CBM is mainly distributed in the Ordos Basin, Qinshui Basin, and Junggar Basin [1,15,21,22].

3.1.2. Remaining Resources and Exploration Potential

By the end of 2021, China’s total proven geological reserves of natural gas were ~18 × 10¹² m³, with a proven rate of 8% [4,19,24]. By the end of 2020, the cumulative production of conventional natural gas was ~2.23 × 10¹² m³, with a recovery ratio of 13.23%. The remaining recoverable resources amounted to 66.14 × 10¹² m³, and the remaining technically recoverable reserves were 5.93 × 10¹² m³ [5,17,24]. The annual production of gas reservoirs and dissolved gas was 1645 × 10⁸ m³, with a reserve–production ratio of 35.2. Conventional gas offers high exploration potential since 40% of conventional gas resources are currently undiscovered [5,20,24].

Natural gas exploration and development have been following an increasing trend since the 13th Five-Year Plan [17,20,62]. Compared with countries, an analysis of the exploration degree and development history in China showed that the proven rate of conventional gas in China is 20.3%, which is still in the early and middle stages of development [5,20,61]. The proven rate of unconventional natural gas is 1.08%, indicating the early stages of exploration. Generally, natural gas development in China began to peak in 2010 [17]. It is currently in the early and middle stages of development, with a low degree of overall exploration, where large- and medium-scale gas fields (groups) can still be discovered, with huge exploration potential [1].

3.2. Exploratory Area Potential

3.2.1. Conventional Gas Exploration

In this paper, we analyze and study potential conventional natural gas exploration areas: foreland alluvial fault zones; marine carbonates; and deep, ultra-deep, and new fields.

The exploration of foreland thrust belts is a crucial component of natural gas exploration [66,67]. Recently, significant breakthroughs and new discoveries have been made in the Qiulitage and Kelasu tectonic belts of the Kuqa foreland in the North Tarim Basin, as well as the lower combination of the middle section of the southern margin foreland in the Junggar Basin [68,69,70]. A high-density 3D seismic survey covering an area of 345 km² was deployed in advance to fix key problems in trap identification, e.g., unclear structures in the Qiulitage structure in the Kuqa foreland of the Tarim Basin [68,69,70]. This contributed greatly to the drilling of the Zhongqiu 1 well in the middle of the Qiulitage structure, leading to significant breakthroughs in terms of reservoir discoveries (Figure 5, [71]). In 2018, high-yield oil and gas flow was obtained from the Zhongqiu 1 well, with gas production of 33 × 10⁴ m³/d and condensate production of 21.4 m³/d [71]. Importantly, a structure with a gas resource potential of 1000 × 10⁸ m³ was identified as a new gas exploration field in the Kuqa Depression [51,71,72].

Seismic data were processed and interpreted for the unknown structure, tectonic transformation zone, structural superimposition zone, and data-splicing area in the Bozi–Dabei unit in the west of the Kelasu structure, Kuqa Depression, deepening our understanding of gas-enrichment conditions [26,69,73]. New gas-bearing structures, e.g., Bozi 13, Bozi 18, Bozi 7, Bozi 15, Bozi 9, and Dabei 9, have been discovered since 2018 [26,69,73]. By the end of 2019, the proven geological reserves in the Kuqa Depression were 1.46 × 10¹² m³, with a gas production of 234 × 10⁸ m³ [74,75]. This represents another condensate reservoir with resources of 1000 × 10⁸ m³ and a major exploration breakthrough among reservoirs at depths of nearly 8000 m in China [76,77]; it was expected to be another area with potential shale gas reserves of 1 × 10¹² m³ ([76,77], Figure 5). An investigation has shown that the Lower Cretaceous area in the Kuqa Depression is characterized by “lower source and upper reservoir, migration in vertical”, where the Yageliemu Formation and Shushanhe Formation are the first regional reservoir–cap assemblages vertically closer to Mesozoic source rocks [74]. The Ketan 1 well drilled into the Cretaceous Yageliemu Formation achieved a high-yield industrial gas flow of 52.7 × 10⁴ m³/d (Figure 5, [74,75,76,77]). The estimated general favorable exploration area at depths of >8000 m was 4960 km², with gas resources of 9035 × 10⁸ m³ and condensate reserves of 3480 × 10⁴ t (Figure 5, [74,75,76,77]). This new discovery opened up strategic progress in gas exploration in the Kelasu structure, encouraging the idea of “seeking another gas field under Kela Gas Field” [69,78].

Recently, a series of major conventional natural gas discoveries have been made in the Cambrian continental reservoirs on the southern slope of the Kuqa Depression (Figure 5, [29]). Major oil and gas fields (e.g., Fuman, Shunbei, and Bozi–Dabei) have been rapidly established, accelerating the pace of reserve exploitation and production in deep basins [23,79]. In 2023, high production was obtained from two risk exploration wells, i.e., Tuotan 1 and Xiongtan 1, at depths of 5700 m and 6700 m, respectively, marking the first discovery of Upper Cambrian dolomite in the west of the Northern Tarim Basin [74,75,76,77]. Reservoirs were identified with resources of 10 × 10⁸ t, confirming the huge exploration potential of multiple reservoirs on the southern slope of the Kuqa Depression and opening up another strategic succession at a scale of 10 × 10⁸ t in the Tarim Basin [74,75,76,77]. Key geological issues relating to the natural gas present in the middle–lower assemblages in the foreland of the southern margin of Junggar Basin, along with associated engineering technologies, have been studied for nearly 20 years [69,78]. In 2018, the Gaotan 1 well, a risk exploration well, was deployed to drill the lower combination in the Gaoquan anticline (Figure 5, [70]). A breakthrough was made in 2019, achieving high-yield oil and gas flow, i.e., a daily oil production of 1213 m³ and a daily gas production of 32.18 × 10⁴ m³, representing the highest production of a single well from onshore clastic reservoirs [60,80]. The Tianwan 1 well was deployed to explore the Dongwan structure, making a major breakthrough in 2022. The daily gas and oil yields were 75.8 × 10⁴ m³ and 127 m³, respectively (Figure 5 [60,80]).

Recently, marine carbonate reservoirs have been an important conventional gas target, with total resources of 22.1 × 10¹² m³, accounting for 56% of conventional gas resources in China [81]. Such reservoirs have also contributed greatly to the increase in natural gas reserves, with significant breakthroughs and new discoveries made in the northern slope of the ancient uplift in Central Sichuan and the high-energy beach controlled by the Fudong fault in Northern Tarim [82,83,84]. Since 2000, the proven gas reserves present in marine carbonates have accounted for 26% of PetroChina’s reserves, on average [4]. At the end of 2019, the proven reserves of the Anyue Gas Field in the Central Sichuan Basin amounted to 10,449.6 × 10⁸ m³, while the constructed yield of the Cambrian system was 110 × 10⁸ m³, and that of the Sinian system was 60 × 10⁸ m³ [85]. Significant breakthroughs have been made in the Sinian–Cambrian system on the northern slope of the Central Sichuan paleo-uplift. For example, the Pengtan 1 well has achieved a daily gas production of 122 × 10⁴ m³, indicating a major discovery on the platform margin at the Dengying 2 member on the northern slope, while the Jiaotan 1 well has achieved a daily gas production of 51.6 × 10⁴ m³ from the first member of the Canglangpu Formation at 7000 m [82,86]. This represents the discovery of new reservoirs, establishing a developmental model for large-scale lithology traps on slopes (Figure 5). In 2022, daily gas outputs of 28.5 × 10⁴ m³ and 20.3 × 10⁴ m³ were obtained from the Deng 4 member and the Longwangmiao Formation at the Dongba 1 well, respectively [58]. Daily gas and condensate outputs of 0.9 × 10⁴ m³ and 47 m³, respectively, were obtained from the Leikoupo Formation at the Chongtan 1 well [82,83,84]. This represented the first industrial oil and gas flow from marl, expanding oil and gas exploration in this basin [58]. Currently, the northern slope of the paleo-uplift shows great exploration potential and is expected to be a large gas province with resources of 1 × 10¹² m³ [82,83,84]. Fault-controlled karst reservoirs in the Tarim Basin have been explored and developed at a large scale [84]. The Fudong 1 well was drilled in the Fuman block to explore a large-scale fault-controlled intra-platform bank, where a major breakthrough was made in 2022 (Figure 5, [87]). The Yijianfang–Yingshan Formation was tested at depths of 7925–8359 m using 7 mm nozzles and an oil pressure of 90.7 MPa, with daily oil and gas yields of 21.4 m³ and 40.5 × 10⁴m³, respectively, increasing the predicted oil and gas reserves by 3870 × 10⁴ t and 1095 × 10⁸ m³, respectively [87]. This confirmed that the combination of intra-platform banks and secondary fault networks could produce high-quality reservoirs, and the estimated oil resources were higher than 10 × 10⁸ t, with the potential for the development of new condensate reservoirs [87].

Recently, in China, (ultra) deep natural gas exploration has made significant breakthroughs, with new progress in the platform–basin area of the Tarim Basin, the Central Sichuan Basin, and the eastern margin of the Junggar Basin [87]. This progress is especially evident in the Tarim platform basin, which has led to an “oil and gas revolution at deep basin”, with oil resources of 1000 × 10⁴ t (Figure 5, [87]). Firstly, fault–karst-controlled reservoirs were discovered in the Shunbei block, with a world-class oil and gas field being established in an ultra-deep basin at high temperature and pressure with depths of 7400–7800 m (an average of 7632 m [23,84]). The reservoir temperature is 151–162 ℃, with an average value of 155 °C, and the formation pressure is 1.10–1.17 MPa [87]. The oil and gas resources amount to ~7 × 10⁸ t and 1 × 10¹² m³, respectively (Figure 5, [88,89]). The total newly proven reserves amount to 1.3 × 10⁸ t, and the built capacity is 105 × 10⁴ t, with an output of 100 × 10⁴ t in 2020 [23,84]. High-yield oil flow was obtained from 19 wells in the No. 4 and No. 8 fault zones of the Shunbei block in 2022, with an increase of 1226 × 10⁸ m³ in proven reserves [23,84]. Secondly, the deepest Paleozoic oil and gas reservoirs in the world have been discovered in the Luntan 1 well, with a drilling depth of 8882 m [90]. The daily oil and gas production of the Cambrian Wusongger Formation at depths of 8203–8260 m was 134 m³ and 4.5 × 10⁴ m³, respectively, where high-quality Yuertus source rocks were drilled (Figure 5, [87]). This represented a breakthrough in the Cambrian subsalt reservoirs, significantly expanding the exploration field. Finally, the Yuejin 3-3XC well, the first deep well drilled by Sinopec in the Tarim Basin, was discovered to yield high-yield oil and gas flow in November 2023, with a daily oil output of 200 t and a gas output of 5 × 10⁴ m³ [91]. The depth of 9432 m represented a new record for offshore drilling in Asia, demonstrating that China has become the global leader in deep-earth technology [91]. This could provide important technology and equipment reserves for natural gas exploration activities in ultra-deep (>10,000 m) reservoirs.

Significant breakthroughs have also been made in conventional natural gas exploration in new stratigraphic sequences and new areas. In recent years, significant breakthroughs in natural gas exploration have been achieved in the Taiyuan Formation of the Ordos Basin and the Shahejie-3 member of the Liaohe Depression in the Bohai Bay Basin, revealing high-yield gas flows and opening new deep-basin gas exploration fields [57]. Significant breakthroughs of natural gas have been made in the exploration of new areas of limestone in the Taiyuan Formation of the Ordos Basin, forming a new area with trillions of cubic meters of reserves to replace it (Figure 5, [49,57]). Generated gas was injected into limestone under a high-pressure difference between the source rocks and reservoirs, forming a typical “sandwich” pattern [49,57]. Two risk-exploration wells (Yutan 1H and Zhoutan 1H) were deployed, resulting in major breakthroughs in Taiyuan limestone reservoirs, with tested high-yield gas flows of 54.9 × 104 m³/d and 12.5 × 10⁴ m³/d, respectively (Figure 5, [49,57]). A total of 22 vertical wells have all drilled high-quality reservoirs, and 81% of these reservoirs were drilled by four horizontal wells [49]. Furthermore, a daily gas production of 19.9 × 10⁴ m³ and 15.5 × 10⁴ m³ was obtained from the Mesozoic and the middle–lower areas, respectively, of the Shahejie-3 (Es-3) member in the Liaohe Depression of Bohai Bay Basin in 2022, discovering gas-bearing intervals from the Mesozoic and Es-3 members and opening up a new deep-basin gas exploration field [1,6,17].

3.2.2. Unconventional Natural Gas Exploration

Recently, a number of major breakthroughs and new discoveries have been made in unconventional fields, including shale gas exploration in deep basins and new sequences, as well as deep CBM and tight gas (Figure 6).

(1)

Shale gas exploration in new sequences and new regions

Whether it is the first trillion-cubic-meter reserve and 10-billion-cubic-meter production shale gas field in the Wufeng–Longmaxi formations of the Sichuan Basin or the recent breakthroughs in ultra-deep shale gas at depths exceeding 4000 m in the Qiongzhusi and Wulalik formations, as well as shallow shale gas in marine-continental transitional facies, these shale gas fields have significantly contributed to China’s natural gas production [92].

Shale gas exploration in the Fuling area has entered a golden age of rapid development, driving the fast development of the gas industry in China [7]. The gas recovery technology used for multi-dimensional development in the Fuling Demonstration Zone has been continuously improved, establishing a development mode for the Jiaoshiba block. There has been multi-dimensional development in the north–central zone and integrated development in the south (Figure 6). The recovery efficiency in the prospect zone increased to 44.6%, indicating reserves with an annual production higher than 85 × 10⁸ m³. The national proven shale gas reserves in 2020 amounted to 2.0 × 10¹² m³, and the output was 200.79 × 10⁸ m³, contributing to industrial development.

Recently, strategic breakthroughs in the shale gas exploration of deep reservoirs, new areas, and new layers have been made, representing the embryonic form of a new area with shale reserves of 1 × 10¹² m³ and a production scale of 1 × 10⁸ m³, providing a sustainable backup area for production [93,94,95,96,97,98]. Firstly, high-yield gas flow was obtained from the deep-buried Upper Ordovician Wufeng Formation and Lower Silurian Longmaxi Formation (>4000 m) by four wells in 2018, including Lu 203, Huang 202, Zu 203, and Zu 202-H1, developing another block with reserves of 1 × 10¹² m³ [99]. Secondly, major breakthroughs have been made in the exploration of three new Permian marine shale sequences since 2022. The Daye-1 well, deployed by PetroChina for deep Permian marine shale, has achieved a daily gas production of 32 × 10⁴ m³ from the Wujiaping Formation [97]. The Leiye 1 well, drilled by Sinopec, produced high-yield gas flow of 42.66 × 10⁴ m³/d from deep-buried Permian Dalong marine shale, which was also obtained from the Leiye 1 HF well at a depth of 5880 m, with a resource volume of 1727 × 10⁸ m³ [96]. The fourth member of the Maokou Formation and the second member of the Permian Wujiaping Formation in the Hongxing area were explored, increasing reserves by 1000 × 10⁸ m³, where a method was developed to simultaneously vertically explore two reservoirs [97]. Thirdly, the Xinye 1, Dingye 1, and Dongye Shen 2 wells in the Qijiang area have obtained a high gas flow of 4 × 10⁵ m³/d from deep shale reservoirs (Figure 6, [100]). Fourthly, major exploration achievements have been made in terms of Cambrian shale (one of the world’s ancient shale systems) and ultra-deep shale reservoirs. In the first quarter of 2023, the Zi 201 well, a wildcat well drilled by PetroChina, obtained a daily gas production of 73.88 × 10⁴ m³ from the Qiongzhusi Formation at 4770–6565 m (horizontal section, [95]). Meanwhile, the Wulalik Formation at the Li 86 well, Qitan 10 well, Li 99 well, and E 102X well at the western margin of the Ordos Basin reached daily gas productions of 15.2 × 10⁴ m³, 10.2 × 10⁴ m³, 4.2 × 10⁴ m³, and 16.7 × 10⁴ m³, respectively, in 2022 [94]. The daily oil production of the Yintan 3 well was 5.3 t, representing a major breakthrough in Wulalik marine shale oil and gas exploration in the Qilian Sea (Figure 6, [94]).

CBM reserves in China are characterized by “Four Low and One High” (low gas saturation, low permeability, low resource abundance, low reservoir pressure, and high metamorphism, as shown in Figure 6 [101]). These CBM resources are characterized by multiple coal ranks, multiple depths, multiple forms of gas generation, multiple sources, and multiple transformations. They present difficulties in terms of development due to inferior geological conditions and lower production than those found in the United States [101]. In recent years, significant breakthroughs have been made in CBM exploration on the eastern edge of the Ordos Basin, forming a new area with trillions of cubic meters of reserves [102,103]. The “forbidden zone” of a 1500 m theoretical depth for CBM exploration and development was broken into at the eastern margin of the Ordos Basin (Figure 6 [101,102,103]), resulting in leapfrogging development [101,102,103]. Major progress has been made in deep CBM exploration at the Daning–Jixian block, Shenfu block, Daniudi block, etc., with proven geological reserves of >3000 × 10⁸ m³, making them important unconventional gas exploration targets in China (Figure 6 [101,102,103]). Firstly, the annual production of deep CBM from PetroChina’s pilot test region in the Daning–Jixian block exceeded 10 × 10⁸ m³ [101,102,103]. Risk-exploration wells, e.g., the Nalin 1H and Jiamei 2H wells, achieved high production (Figure 6 [101,102,103]). The daily gas output of Nalin 1H well is stable at 5 × 10⁴ m³–6 × 10⁴ m³. Eight horizontal wells have been drilled, with an average daily output of >10 × 10⁴ m³ [102]. Newly proven geological reserves in the Nalinhe–Mizhibei block amounted to an increase of 1254 × 10⁸ m³, while the value in the Daji–Shilou block was 1108 × 10⁸ m³ [101]. The first domestic deep CBM reservoirs were confirmed, with gas resources of 1 × 10¹² m³ [103]. Secondly, a deep-buried CBM field was discovered in the Shenfu block by CNOOC, with proven geological reserves exceeding 1100 × 10⁸ m³ [101,102,103]. An innovative CBM accumulation mechanism in deep basins was proposed, along with the concept of “complementary” and “three-dimension” exploration for tight gas and CBM. These results enhanced reservoir simulation and differentiated drainage technology [101,102,103]. The coal seam was generally buried at a depth of 2000 m, with the thickness of single layers ranging between 6.2 m and 23.3 m [102]. The average gas content of 15 m³/t and proven geological reserves exceeding 1100 × 10⁸ m³ indicate good exploration and development prospects for deep CBM at the eastern margin [101,102,103]. At present, over 100 exploration wells have been deployed in this block, and the maximum daily output of a single well is 26,000 × m³ (Figure 4, [102]). Thirdly, Sinopec has made a major breakthrough in terms of CBM exploration at a depth of 2800 m, with a CBM resource potential of 1000 × 10⁸ m³ in the Daniudi block [102]. The daily output of deep-buried CBM from the Yangmei 1HF well after fracturing was 10.4 × 10⁴ m³, increasing the predicted reserves by 1226 × 10⁸ m³ and further confirming the high-yield law and development potential of deep CBM in the Daniudi Gas Field (Figure 6, [103]). At the end of 2023, the National Energy Administration announced the first batch of four CBM exploration and development demonstration projects in China, as shown in

Table 1. The first CBM exploration and development demonstration projects in China [1,4].

Companies	Primary Construction Contents				Expected
	Production Area (km2)	Production Reserves (×108 m3)	Number of Wells	Production Capacity (×108 m3/y)	Daily Output of Single Well (×104 m3)		Annual Output (×108 m3)
					Vertical Well	Horizontal Well	2025	2026
PetroChina Coalbed Methane Co., Ltd.	85.81	238.52	79	10		4	10	10
China United Coalbed Methane Company	158.66	370.9	2861	13.7	0.3	1.3	12.3	13.7
Shanxi Jinyang Fenghui Coal Industry Co., Ltd.	89.75	160.32	231	5	0.3	1	3	5.1
Sinopec East China Oil & Gas Company	6.7	10.7	9	0.69	1	3	0.5	0.3

[101,102,103].

Tight gas in China is mainly distributed in the Ordos Basin, Sichuan Basin, Songliao Basin, Tarim Basin, Bohai Bay Basin, Tuha Basin, and Junggar Basin. The development of tight gas utilization has undergone three development stages: the initial stage (before 2000; see Figure 6 [48,104,105,106]), large-scale discovery (from 2000 to 2005), and rapid development (since 2006 [48,104,105,106]). Since the 13th Five-Year Plan, reservoir-forming combinations, distribution laws, and gas-generation theories have been summarized for tight gas in three basin types: cratons, fault depressions, and foreland basins [28,70,107]. Development theories, e.g., multi-stage depressurization and man-made reservoirs, have been proposed for tight gas [28,70,107]. With the rapid development of the Ordos Basin as the core area, a series of tight gas reservoirs, such as in Shenmu, Yichuan, and Huanglong, have been discovered and put into production [48,104,105,106]. Significant progress has also been made in the exploration of Western and Northern Sichuan, accelerating the development progress of tight gas exploitation in China [32]. By the end of 2020, the proven geological reserves of onshore tight gas in China amounted to 5.49 × 10¹² m³, with a proven rate of only 25.1%, indicating that it was still in the early and middle stages, with further increase potential [105,106]. In 2020, China became the third-largest tight gas producer in the world, with an annual output of 470 × 10⁸ m³, accounting for 24.4% of the total gas production [105,106]. Specifically, the production was 430 × 10⁸ m³ at the Ordos Basin, 35 × 10⁸ m³ at the Sichuan Basin, and 5 × 10⁸ m³ at the Songliao Basin [48,104,105,106]. Hence, the tight gas production in the Ordos Basin exceeded 90% of the total tight gas production in China, making this the core region for current and future tight gas development in China [49]. In 2023, new progress was made in tight gas exploration; for instance, proven reserves of 1000 × 10⁸ m³ were identified in the Hexinghcang Gas Field and Bazhong Gas Field in the Western Sichuan Basin, contributing to large-scale production (Figure 6, [48,104,105,106]). High production has been obtained from the deep-buried Xujiahe Formation via nine tight gas wells in the Hexinghcang block, with proven geological reserves of 1330 × 10⁸ m³ and an annual gas output rapidly exceeding 10 × 10⁸ m³ [48,104,105,106]. A major breakthrough has been made in tight oil and gas exploration in the Jurassic Lianggaoshan Formation in the north of the Sichuan Basin [108]. Stable oil and gas flow of >100 t/d has been obtained for the first time from the Lianggaoshan channel at the Bazhong 1HF well, with evaluated and practical resources of over 1 × 10⁸ t [48,104,105,106].

3.3. Project Planning

According to the goals of China’s natural gas development plan, five major projects to increase production and stabilize production will soon be implemented, fully promoting conventional gas, steadily promoting Sichuan Chongqing shale gas, ensuring the stable production of tight gas in Ordos, and accelerating the development of deep CBM in the mountain front of Kuqa, Tarim [45,47,103]. The overall implementation of the targets for the Shangchan New Area will continue to see rapid growth in domestic natural gas reserves and production during the 14th Five-Year Plan period [45,47,103].

3.3.1. Natural Gas-Producing Project at the Southern Sichuan Basin

The Sichuan Basin is rich in natural gas resources, with both shale gas and tight gas contributing significantly to production [92,107]. Currently, the proven geological reserves of the shale gas development zone in the Southern Sichuan Basin are 1.7 × 10¹² m³, with an annual output of 139 × 10⁸ m³ in 2022 [92,107]. Here, the gas production from reservoirs at depths of <3500 m was high, e.g., the average production of test wells in the Changning block was 28.25 × 10⁴ m³/d, with EUR of 1.34 × 10⁸ m³ (Figure 7 [32]). The production capacity of deep reservoirs has been fully established, with a production scheme of 120 × 10⁸ m³ being prepared [109]. The medium- and long-term production plan is to comprehensively perform integrated geological engineering, strengthen new technologies and processes, and increase EUR by >10% during the 14th Five-Year Plan to (1.4–1.8) × 10⁸ m³ [1]. A type I prospect area is to be developed in the first production period, with the output expected to be >200 × 10⁸ m³ in 2025, 300 × 10⁸ m³ in 2030, and 400 × 10⁸ m³ in 2035 [1].

Additionally, the Sichuan Basin’s Lower Paleozoic formations hold significant potential for natural gas exploration [30,50]. Currently, the proven geological reserves of the Anyue Gas Field in the Sichuan Basin amount to 10,368 × 10⁸ m³, where the annual outputs of the developed Longwangmiao and Deng 4 gas reservoirs in the Dengying Formation are 90 × 10⁸ m³ and 60 × 10⁸ m³, respectively [107]. The planning and deployment of the stable production project in the Sulige Gas Field continue to optimize well patterns and develop low-cost development technology [49]. The annual output in 2022 was 300 × 10⁸ m³, which is expected to be stable until 2035 [49]. The projected geological reserves for 2021–2035 are 8400 × 10⁸ m³ [49]. The output in 2022 was 157 × 10⁸ m³, including 83.1 × 10⁸ m³ from Longwangmiao gas reservoirs and 66.7 × 10⁸ m³ from Sinian gas reservoirs [85,107]. The medium- and long-term production planning for the Anyue Gas Field aims to optimize and adjust the Longwangmiao gas reservoirs, decreasing production from 90 × 10⁸ m³ to 60 × 10⁸ m³ while maintaining stable production of 60 × 10⁸ m³ from the Deng 4 member at the edge of the platform [58]. The gas reservoirs within the platform—the Deng 2 Member and Qixia Formation—were evaluated, with an average annual production of 10 × 10⁸ m³ during 2021–2035, 135 × 10⁸ m³ in 2025, and 150 × 10⁸ m³ in 2030; the output is predicted to be stable until 2035 [85].

The Upper Paleozoic Permian Maokou Formation also possesses abundant natural gas resources [93]. Geological reserves of natural gas in the Maokou Formation gas reservoirs, Penglai Gas Field, and Sichuan Basin amount to 3 × 10¹² m³ [93]. Risk wells, e.g., the Pengtan 1 well and Jiaotan 1 well, have experienced major strategic breakthroughs at the edge of the Maokou Formation, with submitted third-class reserves of 7227 × 10⁸ m³, where the estimated proven reserves are expected to exceed 1 × 10¹² m³ (Figure 8, [82,93]).

3.3.2. Stable Producing Project at Sulige Gas Field

The Sulige Gas Field in the Ordos Basin was discovered in 2000 (Figure 9 [45,49]). Its current proven geological reserves are 3.61 × 10¹² m³, with the fully utilized part of the well accounting for 1.15 × 10¹² m³, while the reserves in the remaining undeveloped unit are 2.45 × 10¹² m³, including exploitable geological reserves of 9808 × 10⁸ m³ [49].

3.3.3. Increasing Production Project at the Bozi–Dabei Block

The conceptual design of the project aimed to increase production from the Bozi–Dabei block in the Kuqa foreland belt of the Northern Tarim Basin is as follows: firstly, develop 35 productive traps with geological reserves of 6559 × 10⁸ m³ [74,75]. Secondly, utilize 17 traps from 2012 to 2025, with reserves of 4579 × 10⁸ m³ [76]. Thirdly, utilize 18 traps from 2026 to 2044, with reserves of 1980 × 10⁸ m³. Finally, replace and stabilize production, with an annual production of 100 × 10⁸ m³ being achieved in 2025 [77].

The production plan for the Bozi–Dabei Gas Field is to complete seven development schemes and build a production capacity of 50 × 10⁸ m³, accelerate reserve upgrading, implement movable reserves, ensure a reserve base, and control water in advance [74,75]. The average annual production built would be 6.1 × 10⁸ m³ from 2021 to 2035, with an annual output of 100 × 10⁸ m³ in 2025, which would help maintain long-term and stable production [77].

4. Analysis of China’s Natural Gas Industry Development Prospects Based on SWOT

4.1. Advantages of Sustainable Development

4.1.1. Reserve Advantages

On the one hand, the remaining recoverable reserves of natural gas have been rising year by year since 2006, resulting in the advantageous faster development of reserves [1,6]. The annual natural gas production growth rate, the remaining recoverable reserves of natural gas, and the natural gas storage and extraction ratio in the past 10 years all support China’s annual gas production reaching 2500 × 10⁸ m³ by 2025 [1,6].

On the other hand, China’s unconventional natural gas resource potential is huge, and the geological resources of shale gas are 105.72 × 10¹² m³ [23]. Among them, the resources of marine shale gas are 70 × 10¹² m³, and the recoverable resources are 21.8 × 10¹² m³ [4,17]. Marine shale gas has become the focus of China’s near-term production. It is expected that from 2021 to 2040, the country will add 16 to 20 × 10¹² m³ of new geological reserves of proven natural gas [47]. Among them, the new conventional gas will be 10–12 × 10¹² m³, shale gas will be 6.0–7.5 × 10¹² m³, and coal bed methane will be 0.5 × 10¹² m³ [4,17]. The proven rate of recoverable resources for conventional gas at the end of 2040 will be 16.2%, that of recoverable resources for shale gas will be 8.6%, and that of recoverable resources for coal bed methane will be 7.6% [1,6].

For sustainable development, natural gas production in China is predicted to be (2450–2600) × 10⁸ m³ in 2025 based on resource potential and exploration prospects, including conventional gas (including tight gas) of (1980–2080) × 10⁸ m³, shale gas of (350–380) × 10⁸ m³, and coalbed methane of (120–140) × 10⁸ m³ [1,17,23].

4.1.2. Mining Advantages

China is rich in natural gas resources, with a low proven rate (only 8.6%), offering the advantage of high-speed development [1]. Currently, nearly 50% of China’s proven natural gas reserves have not been developed [17]. Although most of these reserves are poor in quality and will be difficult to develop economically and effectively, it is expected that their utilization will be significantly improved with the rapid development of conventional and unconventional gas theories, as well as advances in exploration and development technology [4].

4.1.3. Layout Advantages

On the one hand, at present, under the natural gas development strategy of accelerating exploration in the west, developing offshore resources in the east, and expanding exploration, China adheres to stabilizing the old areas [17,21]. It also focuses on accelerating new areas and developing both conventional and non-conventional resources [5]. These efforts are aimed at promoting the sustained and rapid growth of natural gas reserves and production [15,18,21].

On the other hand, the increase in reserves from new regions in China could accelerate natural gas exploration and development during the “14th Five Year Plan” [23]. The recent increases in reserves have mainly been distributed across thirty zones in four major fields: lithologic–stratigraphic traps, marine carbonate reservoirs, foreland basins, and unconventional resources in the Sichuan Basin, Ordos Basin, Tarim Basin, Songliao Basin, and Junggar Basin [1,4,17]. The Ordos Basin, Sichuan Basin, Tarim Basin, Northern South China Sea, and East China Sea will be the primary exploration fields in the future. The recoverable resources of conventional gas and tight gas to be discovered amount to 42 × 10¹² m³, accounting for ~80% of recoverable gas resources in China [1,4,17]. Currently, five reserve-increasing fields have been developed at a scale of 1 × 10¹² m³ [18]. The Junggar Basin, Bohai Bay Basin, and Qaidam Basin are three reserve-increasing fields. The reserves have a scale of 1 × 10⁸ m³ and contain unconventional resources, and offshore resources will be crucial for the growth of new proven reserves in China [1,27,70].

4.2. Current Disadvantages

China’s natural gas industry is currently in a stage of rapid development. It faces two main problems.

Firstly, natural gas pipelines are still unable to meet market demand. The rapid expansion of natural gas consumption in China has outpaced the development of pipeline networks, leading to bottlenecks and supply issues [15,21,106]. The lack of adequate pipeline capacity restricts the efficient distribution of natural gas from production sites to consumers, hampering the overall growth and reliability of the industry [5]. When comparing this stage with that seen in Western developed countries reveals that there is a big gap between China and them in terms of the construction of underground natural gas storage and transportation pipelines [5,21]. As of 2020, there are 120,000 km of natural gas pipelines in service nationwide, with a primary pipeline capacity of 340 billion cubic meters/year, equivalent to 1/6 of that of the U.S., 1/10 of that of France, and 1/15 of that of Germany [15,18]. The natural gas pipeline capacity is still insufficient, and there is not enough interconnection and interconnectivity, especially lagging behind in the construction of the “last kilometer” [15,21,106]. Particularly, the lag in the construction of the “last kilometer” restricts the demand of downstream user consumption [20]. Currently, the working volume of underground natural gas storage accounts for only 3.4% of China’s natural gas consumption, compared to the world average of about 24% [15,16,21]. Among other things, issues such as pipeline construction, its interconnection, natural gas transmission and deployment capacity, and poor systematic and emergency response capacity for the transmission and distribution of natural gas have been major factors contributing to the tight supply and demand in the market seen in recent years [15,17,23]. This situation is exacerbated by extreme climatic conditions and the winter peak season for gas consumption. In addition, the provincial gas transmission and distribution pipeline networks are not developed to the same extent, and the regional fragmentation of gas transmission and distribution is a prominent contradiction [1,23].

Secondly, gas storage and peaking capacity are insufficient. China’s gas storage and peaking capacity are not sufficient to balance the fluctuations in supply and demand, especially during peak periods [16]. This lack of storage capacity means that the country is unable to store excess gas during periods of low demand and use it during high-demand periods, which leads to supply shortages and affects the stability of the natural gas supply [5]. At present, China has formed a gas-storage capacity of 25 billion cubic meters, with a working gas volume of 14.7 billion cubic meters, accounting for only 4.5% of China’s natural gas consumption, much lower than the international average of 12% to 15% [15]. In terms of imported LNG storage capacity, China’s LNG receiving stations are few in number, small in size, and limited in storage capacity [5]. A single LNG receiving station typically supports storage tanks with a capacity of 160,000 cubic meters, which is far less than that of other LNG-importing countries like South Korea and Japan [15]. South Korea’s largest Pyeongtaek LNG receiving terminal has 23 storage tanks, while Japan’s Sleevepool LNG receiving station has 35 storage tanks [1,23]. China’s natural gas consumption has obvious seasonality, especially during the winter heating period in the north, leading to occasionally tight supplies [15,17,23]. With the expansion of natural gas consumption in the future, there is an urgent need to improve the capacity of gas storage and peaking [5].

4.3. Development Opportunities and Challenges under the Dual-Carbon Goal

China’s natural gas development is characterized by both opportunities and challenges [15]. The IGU defined natural gas as “the transition from fossil energy to new energy” in 2012 before repositioning it as “the most realistic option to replace coal and realize ‘clean and low-carbon’ and a lifelong partner of renewable energy” in 2018 [15,16,21]. Hence, the role of natural gas was further affirmed and enhanced [1,23]. BP’s predictions suggest that natural gas will replace oil as the primary source of fossil energy in 2035 and that the proportion of natural gas in primary energy consumption will increase to 26%, accounting for 21% by 2050 [15,21,106].

Natural gas in China has high development potential due to the goals of carbon peaking and carbon neutrality [15,16,21]. On the one hand, natural gas consumption in China increased by >200 × 10⁸ m³ annually during the 13th Five-Year Plan, with an average annual growth rate of >10% [18]. Consequently, the energy structure has been gradually optimized, where the proportion of natural gas in primary energy consumption increased from 5.8% in 2015 to 8.8% in 2020, significantly reducing emissions of pollutants (e.g., carbon dioxide, sulfur dioxide, and dust) and significantly improving environmental quality [16].

On the other hand, China is the world’s largest coal consumer; specifically, coal accounts for 57% of China’s primary energy consumption. Hence, the first step to achieving the goals of carbon peaking and carbon neutrality is to reduce coal consumption [15,16,17,18]. It is widely accepted that it will be necessary to reduce coal consumption, stabilize oil consumption, increase gas consumption, and develop renewable energy during the energy transition [15,16,17,18]. Since natural gas is cleaner than coal and has advantages in terms of costs, resource potential, technological maturity, and stability compared with renewable energy, it is expected to play an important role in energy consumption, which will continue to grow rapidly in the future [15,16,21]. China’s external dependence on natural gas was 44% in 2022. Its natural gas consumption will reach a peak of 6500 × 10⁸ m³ before 2035, with predicted external dependence close to 62%. After that, it will decrease slowly and will remain at 5200 × 10⁸ m³ by 2060, with consumption accounting for >10%.

Therefore, in the future, natural gas will play an increasingly important and prominent role in ensuring energy supply in China, accelerating the green and low-carbon transformation, and achieving the dual-carbon goals. Under the dual-carbon goals, the natural gas industry is facing unprecedented development opportunities. Hence, it will be essential to increase the gas supply capacity in order to guarantee national energy security in the future.

4.4. Development Goals and Prospects

In 2022, PetroChina’s natural gas production was 1454 × 10⁸ m³, accounting for 66% of the total output in China [1,23]. Unconventional gas production was 600 × 10⁸ m³, accounting for 71.43% [15,16,17,18]. The newly increased reserves and production were the primary contributors in China (Figure 10).

It is estimated that the national natural gas production will be 3200 × 10⁸ m³ in 2035, where PetroChina’s production will be ~2000 × 10⁸ m³ (accounting for 62.5%), including conventional gas production of 939 × 10⁸ m³ (47%) and unconventional gas production of 1061 × 10⁸ m³ (53%, [15,16,21]). At that time, PetroChina will simultaneously develop conventional and unconventional resources and will continue to maintain its dominant position in natural gas reserves and production [91].

4.5. SWOT Matrix Analysis of China’s Natural Gas Industry Development

Focusing on the internal and external environment of China’s natural gas industry to analyze the strengths (S), weaknesses (W), opportunities (O), and threats (T), four different strategies can be produced, namely, the S-O strategy, the W-O strategy, the S-T strategy, and the W-T strategy, as shown in

Table 2. SWOT strategy map of China’s natural gas industry.

External Environment	Internal Environment
	Advantage (S) 1. Unconventional natural gas resources have enormous potential. 2. Nearly 50% of the proven natural gas reserves have not yet been utilized. 3. Rapid development of conventional and unconventional natural gas geological theories and exploration and development engineering technologies. 4. Following the natural gas development strategy of accelerating the development of the western region, developing the sea area, and expanding the eastern region.	Weaknesses (W) 1. Natural gas pipelines still cannot meet market demand. 2. With the expansion of natural gas consumption, there is an urgent need to improve the capacity for gas storage and peak shaving. 3. Three-dimensional seismic, drilling, seismic interpretation, logging, and other technologies cannot adapt to deep wells and complex terrain layers. 4. The comprehensive evaluation, three-dimensional exploration, sweet spot identification, and geological engineering integration of unconventional gas are relatively weak, which restricts the large-scale commercial development of unconventional natural gas.
Opportunity (O) 1. Relevant policies and planning document support. 2. There is a high demand in large domestic and international markets. 3. Technical support for technological innovation and digital transformation.	S-O Strategy (utilize internal strengths and take advantage of external opportunities)	W-O Strategy (give full play to external advantages and customer service internal disadvantages)
Challenge (T) 1. Single development model and lack of market competitiveness. 2. Investment is gradually becoming conservative, leading to an increase in natural gas production and a slowdown in the construction of gas supply and consumption facilities. 3. There are problems with the natural gas pricing mechanism. Diversified development increases its economic costs.	S-T Strategy (strengthen internal advantages and avoid external threats)	W-T Strategy (reduce internal disadvantages and avoid external threats)

and Figure 10 [110].

5. Development Strategies and Suggestions

5.1. Dual Innovation in Theory and Technology

Theoretically, major projects should be set up for deep-ultra-deep natural gas, deep shale gas, and deep coalbed methane [25]. The integration of digitalization, new energy, and oil and gas development should be accelerated, as well as the construction of a sound and optimized natural gas standard measurement system [111]. To provide theoretical guidance, technology for exploration should be improved, as well as natural gas coupling theory and other aspects of research, to continue to enhance the ability to guarantee natural gas resources. In terms of technology, firstly, the comprehensive management of developed gas fields should be strengthened to improve the final recovery rate of gas fields [15,21,106]. Secondly, we should accelerate the development of the proven Lingshui 17-2 gas field and seven other fields with proven geological reserves of more than 1000 × 10⁸m³ so as to improve the utilization rate of the proven reserves [15,16,17,18].

On this basis, theoretical research should be combined with technological applications, the drilling of gas wells and ultra-deep exploratory wells should be increased [12], technology and management innovation should be utilized to break through the forbidden zone, and the efficiency of gas field development should be improved [1,2]. Thus, we can realize the double-wheel drive of technology and management innovation and lay the theoretical and technological foundations for natural gas development.

5.2. In-Depth Planning of Regional Layout

Firstly, in terms of large basins, exploration activities should be carried out on large-scale reservoirs (with oil equivalents of 5 × 10⁸ t) at blocks with a resource scale of ×10¹² m³ [1,2,3]. It will be necessary to seek resources in the Sichuan Basin, e.g., the Sinian–Cambrian area on the north slope of the Chuanzhong ancient uplift and deep shale reservoirs in the Southern Sichuan Basin [86,107]. It will be essential to strengthen exploration in the Upper Paleozoic Ordovician under salt intra-platform shoals and reefs in the Ordos Basin [57]. Emphasis should be placed on exploring deep reservoirs in the Bozi–Dabei block in the western section of the Kuqa Depression, as well as in the Tazhong block in the Tarim Basin, and on enhancing risk exploration in new areas [68,69,70]. It will be important to explore Permian–Triassic lithological reservoirs at the Fukang–Dongdaohaizi sag of the Eastern Junggar Basin [1,2,3,4]. We should actively prepare and expand seven strategic replacement fields or major replacement fields, namely, Permian volcanic rocks and Qixia–Maokou sequences in the Western Sichuan Basin, the Qiulitage structural belt in the Kuqa Depression in the Tarim Basin, Cambrian sub-salt reservoirs at the Tarim platform and Southwest Tarim Basin, carbonate reservoirs at the southern margin of the Junggar Basin, and the paleo-uplift in the Ordos Basin [1,4,17].

Secondly, risk fields, plays, and targets must be further sought and investigated to highlight new areas, plays, intervals, and types [1,2,3]. Five fields, i.e., marine carbonate reservoirs, foreland thrust zones, shale gas, new areas, and offshore resources, should be investigated in three stages, i.e., seeking targets, play preparation, and field surveying [1,2,3,4,5].

5.3. Vertical Industry Chain Synergy

Based on systematic thinking, from the perspective of integrating production, supply, storage, and marketing, a synergistic system of natural gas production, supply, storage, and marketing should be vigorously constructed [15,16,17,18]. Specifically, firstly, the relationship between gas fields, storage, LNG, and external transportation should be sorted out separately [15,16,21]. A natural gas resource supply system with a solid domestic base and diversified overseas supply should be built [1,23]. Secondly, a complete system of natural gas transmission and supply with “five horizontal and four vertical pipeline networks, three LNG receiving terminal groups and five hubs” to form a unified gas supply pattern of “one network” across the country should be built [15,16,17,18]. Then, the new concept of reservoir construction should be expanded. We will build a “7 + 3 + 1” multi-level gas storage and peaking system to quickly and effectively enhance the ability of peaking and guaranteeing supply [15,16,21]. Eventually, a modern natural gas production, supply, storage, and marketing system with a reasonable gas consumption structure and safe and reliable operation will be formed [15]. The goal of a diversified gas supply, perfect pipeline network layout, adequate gas storage facilities, and a balanced supply and demand relationship will be realized.

5.4. Preferential Policy Support

Previous estimations suggest that China’s remaining available tight gas reserves can stably produce 350 × 10⁸ m³/a without subsidies, which could support the production of 400 × 10⁸ m³/a through densifying wells in mature gas fields under a subsidy of 0.2 CNY/m³ [1,2,3]. The low-abundance type I reserves could be used to increase production by 500 × 10⁸ m³/a with a subsidy of 0.4 CNY/m³. If the subsidy is 0.6 CNY/m³, the low-abundance type II reserves could support the production of 600 × 10⁸ m³/a with a subsidy of 0.6 CNY/m³ [16]. Taking deep shale gas resources with buried depths of >4000 m as an example, they effectively offer no benefit or have poor benefits under the current technical and economic conditions [5]. Most of these shale gas reserves could be revitalized with a subsidy of 0.2–0.3 CNY/m³ [20]. Therefore, the government should continue to provide certain policy support in terms of financial subsidies, tax incentives, prices, and technology for the development of unconventional and other low-grade natural gas resources. Only then can we ensure that unconventional natural gas is produced on an efficient scale that encourages the rapid development of the natural gas industry.

6. Conclusions

China’s natural gas industry has achieved important results in resource evaluation, resource reserves, capacity improvement, theoretical technology, and industrial chain development. It has not only realized leapfrogging development relating to unconventional gas but has also met the continuously growing demand for natural gas.

This study digs deep into resource distribution and technological development from geographical and technical levels. It has been found that natural gas exploration has recently experienced a number of major discoveries and undergone new breakthroughs. Starting from the latest engineering planning aspects, it argues for the sustainability of China’s natural gas industry. Based on the SWOT analysis method, it has been demonstrated that the development of the natural gas industry is promising under the goal of “double carbon” from the perspectives of advantages, disadvantages, opportunities, and challenges. On this basis, it is predicted that PetroChina will continue to be the main natural gas producer in the future, taking into account the business plan of PetroChina. Finally, based on the strategic combination scheme given by SWOT, four strategic measures and development suggestions for the development of China’s natural gas industry are proposed, providing theoretical support for the subsequent development of China’s natural gas industry and decision making support for the government and enterprises.