Study N Application Of PPP Model To Shale Gas Development Industry In China

In the background of global energy-saving and emission reduction to reduce greenhouse gas emissions, countries around the world are actively promoting natural gas consumption, as another form of unconventional nature gas shale gas comes under increasing scrutiny. The United States’success in shale gas development has provided demonstration effect for the world, Canada, UK, Poland, Japan and other countries have formulated a strategic long-term development for shale gas development. In12five years plan, shale gas has been listed as the172nd minerals resources, and will be to focus on developing in the next five years. In2012March, the national energy board enacted "Shale gas development planning (2011-2015)", proposed complete geological investigation and evaluation of1000billion cubic meters of shale gas resources area, proven recoverable shale gas reserves of200billion cubic meters, achieve annual production ability of6.5billion cubic meters, and prospect annual production ability up to60-100billion cubic meters by2020.In2011June and2012September, the Ministry of land and Resources had held two rounds of shale gas exploration rights public bidding respectively. The first round of bidding applied tendering invitation, four large oil and gas central enterprises:CNPC, Sinopec, CNOOC, prolong, and two state-owned enterprise: China United coal bed methane, coal bed methane in Henan had been invited, tendered total area about11000square kilometers of four shale gas exploration block. In the second round of shale gas exploration rights public bidding, the Ministry of land and resources reduced for bidding qualification requirements, all enterprise that registered capital above300million Yuan, with the oil and gas exploration qualified can participate the bidding. This bidding is widely regarded as a major reform to the management system of mining right of our country by the Ministry of land and resources.Listed shale gas as national focus on the development minerals, suggest shale gas development’s prospective future in China but the industry still faces two problems:NO1is the huge funding gap, NO2is mining right monopoly. Because of the special geological conditions, the majority shale gas reservoir areas and conventional natural gas areas are overlap; mining rights monopoly caused of shale gas development is limited to Petro China, Sinopec two state-owned petrochemical enterprises. Shale gas development industry financing in our country has many problems, mainly financing body single, lack of financing channels and lack of flexibility of capital exit mechanism effectively, these problems seriously hinder the shale gas industry’s development in china.To break monopoly is the key to solve the shale gas development industry’s difficulties in China. based on a reasonable transfer of shale gas blocks mining rights condition, explores an effective financing mode, effectively activate the capital market enthusiasm, make full use of small and medium-sized enterprises’advantage in technological breakthrough. Draw on developed countries’the successful experience in the development of shale gas, like the United States, Canada and Japan, paying attention to environmental protection in the process of development, cooperation with small and medium enterprises, guaranteed the small and medium-sized enterprise legitimate discourse and the right to return, create a good the environmental for small and medium-sized enterprises cooperate with large oil and gas development enterprises in the process of shale gas development industry, establish a new model for private enterprises and government cooperation.The PPP model was first proposed by the British government, and has been widely applied to public sector, such as public school, hospital, road traffic, sewage treatment plant, prisons, public safety facilities, in the90’s of the last century. through contract design and institutional arrangements, the PPP mode integrate the advantages of government departments and the private sector, solve the contradiction of infrastructure construction and government funds insufficient, give full play to the private sector’s advantages in improve project efficiency, provides the high quality public products and services, cost sensitive etc, provides a new mode of cooperation for government departments and the private sector in public infrastructure construction operation. Discussion on the application of PPP model in shale gas development industry financing, providing an effective way for the "Twelfth Five-Year Plan" proposed "to promote shale gas and other unconventional oil and gas resources development and utilization." At the same time, provide positive significance for those, which need high early investment, high risk, and long investment recovery period emerging industry financing.This paper, analyzed the present financing status and problems in shale gas development industry in China at present stage, explored the mechanism of PPP model application in shale gas development industry, including the participation main body analysis, specific form of PPP model that suitable for the shale gas development industry, risk and revenue distribution mechanism, government subsidy mechanism. Introduced the successful experience of shale gas development industry in the United States, Canada and Japan, analyzed the significance of reference to China. Finally put forward some suggestions on China’s shale gas development industry.