Ministry of Finance: Rewards will be given to the exploitation and utilization of unconventional natural gas such as shale gas

   Recently, the Ministry of Finance issued the "Interim Measures for the Management of Special Funds for Clean Energy Development", stating that special funds will be used to grant rewards and subsidies to the exploitation and utilization of unconventional natural gas such as coalbed methane (coal gas) and shale gas, and allocate them in accordance with the principle of "more and more subsidies". 

   If the amount of exploitation and utilization exceeds the previous year, a cascade bonus will be given according to the degree of excess; if the amount of exploitation and utilization of the previous year is not reached, the bonus and compensation fund shall be deducted according to the degree of non-compliance; The principle of “increasing winter subsidy” is to give rewards and subsidies.

   The amount of unconventional natural gas exploitation and utilization included in the scope of bonus and compensation shall be determined in the following way:

   Unconventional natural gas exploitation and utilization = shale gas exploitation and utilization amount + CBM exploitation and utilization amount × 1.2 + tight gas exploitation and utilization amount compared with 2017

   The formula for calculating bonus funds for unconventional natural gas exploitation and utilization is as follows:

   A certain place (central enterprise) current year's award gas supply volume = previous year's extraction and utilization + (current year's extraction and utilization in heating season-previous year's extraction and utilization in heating season) × 1.5 + (current year's extraction and utilization-previous year's extraction and utilization) × corresponding Distribution coefficient

   In a certain place (central enterprise), when the amount of reward gas in the current year is ≤ 0, it will be calculated as 0

   Subsidy funds for a certain place (central enterprise) in the current year = total amount of unconventional natural gas award and supplementary funds for the year / National award gas supplement for the year × a certain place (central enterprise) award gas supplement for the year

   The allocation coefficient of unconventional natural gas exploitation and utilization bonus funds is determined in the following way:

(1) For the part exceeding the output of the previous year, the distribution coefficient shall be determined according to the excess proportion:

For the output exceeding 0-5% (inclusive) of the previous year, the distribution coefficient is 1.25;

For products exceeding 5-10% (inclusive) of the previous year’s output, the distribution coefficient is 1.5;

For those exceeding 10-20% (inclusive) of the previous year’s output, the distribution coefficient is 1.75;

For those that exceed the output of the previous year by more than 20%, the distribution coefficient is 2.

(2) For those that have not reached the output of the previous year, the distribution coefficient shall be determined according to the proportion of non-compliant:

For the part that does not meet the standard of 0-5% (inclusive) of the previous year's output, the distribution coefficient is 1.25;

If the part that does not meet the standard is 5-10% (inclusive) of the previous year's output, the distribution coefficient is 1.5;

If the part that does not meet the standard is 10-20% (inclusive) of the previous year's output, the distribution coefficient is 1.75;

The distribution coefficient is 2 if the unqualified part is more than 20% of the previous year’s output.

(3) The incremental portion of unconventional natural gas produced during the heating season (January-February, November-December each year) has a distribution coefficient of 1.5.

   Unconventional natural gas exploitation and utilization bonus funds are first allocated in advance and then liquidated. Local and central enterprises, in accordance with the principle of conducive to the exploitation of unconventional natural gas, coordinate the allocation of bonus funds and use them for related work on the exploitation and utilization of unconventional natural gas.

   The implementation period of the special funds is 2020-2024. After expiration, apply for renewal in accordance with the prescribed procedures.