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Southwestern China's Chongqing municipal government announced on Tuesday that it will build 30 billion cubic meters of shale gas production capacity by 2020 with an annual output of 20 billion cu m.

The local government said a total investment of 70 billion yuan ($11.22 billion) will be made in exploration, pipeline construction and equipment manufacturing for the shale gas industry in the region by 2017.

As the most promising area for shale gas development in China, Chongqing has shale gas reserves of 2.05 trillion cu m, according to the Ministry of Land and Resources.

At present, Chongqing has a total annual shale gas production capacity of 2.5 billion cu m. Oil giants including PetroChina Co and Sinopec Group have drilled 162 wells in Chongqing.

Meanwhile, the governments of Sichuan, Shandong and Hunan provinces have all expressed their intent to develop shale gas in their areas.