Abstract: Shale gas exploration in China is still in its infancy. It is proven that shale gas occurs in most of Chinese basins by geologically comparing the hydrocarbon generation with those in the eastern U. S. These basins would be the key target for shale gas exploration. The mid-eastern region, the southern region, the northwestern region, and the Qinghai-Tibet region present broad prospect for shale gas exploration. The southern region in particular has stable thick hydrocarbon-rich shale formations. Shale gas, with a typical"self-generation and self-accumulation" feature, is resistant to damage, despite of the strong late tectonism. Direct evidence of shale gas development in Sichuan Basin has been found, e.g., Weiyuan. Shale gas exploration should start in the area of high organic matter abundance and high degree of thermal evolution, preferably accompanied by the development of natural cracks

Key words: shale gas, unconventional natural gas, exploration