CHINA’S energy giant PetroChina Co. plans to spend more than 10 billion yuan (US$1.6 billion) on shale gas this year, sources with knowledge of the matter said, as domestic competition heats up after rival Sinopec Corp. announced a commercial find.

    Faced with high drilling costs and the complexity of tapping shale gas, China has struggled to revolutionize its energy supplies. China wants to unlock what could be the world’s largest shale gas reserves by emulating the hectic success of the U.S. shale boom.

    PetroChina’s decision to triple its shale gas spending from expenditures on the unconventional fuel over the past few years comes just months after Sinopec lifted hopes that China is near a breakthrough by announcing a commercial find.

    PetroChina, Asia’s largest oil and gas producer, has also lifted its 2015 shale gas output target to 2.6 billion cubic meters, up from the previous 1.5 billion cubic meters, according to a company official and a government source.

    That would represent only about 2.3 percent of China’s total natural gas output of around 113 billion cubic meters last year.

    “PetroChina wants to play catch up after Sinopec’s success,” said a government source who has been briefed on PetroChina’s plans.

    Since around 2010, PetroChina has spent about 3 billion yuan on pilot shale drilling, according to both sources. The firm, which makes up around 70 percent of China’s total natural gas output, has so far largely focused on growing its conventional oil and gas portfolio.

    PetroChina will focus on two pilot zones — Weiyuan-Changning in southwestern Sichuan basin and Zhaotong in Yunnan Province.

    “PetroChina has over the past four years improved understanding of the shale resources and achieved some technological breakthroughs,” said Mao Zefeng, joint company secretary of PetroChina.

    “We’re stepping up shale gas development this year,” he said. (SD-Agencies)