(MENAFN - Kuwait News Agency (KUNA)) China will allocate targeted funds from its budget to subsidize shale gas exploration as part of its efforts optimize the country's energy structure, the Finance Ministry announced on Monday, according to state-run Xinhua News Agency.
A subsidy of CNY 0.4 (USD 6.3 cents) will be offered for every cubic meter of shale gas developed by enterprises during the 2012-2015 period, the ministry said in a statement carried by Xinhua.
Local governments may introduce separate incentives according to regional needs, the statement said.
Shale gas, an unconventional source of natural gas, has gathered steam in the world's second-biggest energy user amid the government's efforts to promote the use of clean energy.
Shale gas has revolutionized the energy industry over the past decade with significant deposits discovered throughout the world.
The US has emerged as a leading producer of shale gas, and its boom has led to a big drop in US carbon emissions because the gas is cheap and clean.
In China's recent auction, 83 companies bid on exploration rights for 20 shale gas blocks, said the Ministry of Land and Resources. China has rich reserves of shale gas, but expensive exploration costs and sophisticated technological requirements have substantially restrained the sector's growth.
Earlier media reports said China aims to pump 6.5 billion cubic meters of shale gas by 2015, with the commercialization of shale gas production expected to occur during the 13th Five-Year Plan period (2016-2020).