Chinese energy giants are making progress unlocking natural gas from shale rock formations, taking a step towards replicating the U.S. shale revolution, according to a new report. But China's national oil companies still have plenty of ground to cover before they even approximate the level of success America's shale pioneers have achieved, reports energy research firm Wood Mackenzie. Over the last decade, China's natural gas production has risen to 9 billion cubic meters. Wood Mackenzie forecasts that output will nearly double to 17 billion cubic meters by 2020 as Chinese energy giants fine tune advanced drilling methods tailored for their country.

In terms of technology, the Chinese NOCs actually have built up their learning curves in a relatively short period. Dr. Tingyun Yang Wood Mackenzie consultant

While that's notable, it still makes China a minnow compared to the whale that is U.S. shale gas. Last year, American drillers produced 474.6 billion cubic meters of natural gas from shale rock. Wood Mackenzie's forecast puts output far short of targets set by Beijing. The country aimed to produce 30 billion cubic meters of natural gas from shale by the turn of the decade to cut its reliance on coal. "The simplest challenge for China to hit the 30 bcm target is the target's too high," Wood Mackenzie consultant Dr. Tingyun Yang told CNBC's "Squawk Box" in Asia. Chinese oil companies would have to roughly double their activity to hit that target, and that is "not physically feasible," says Yang. Still, the drillers are developing homegrown technology and techniques that have cut the time and cost of drilling wells in China's southwestern Sichuan Basin, where a handful of projects are producing gas for Sinopec and PetroChina. China has slashed the costs of drilling exploration wells by 40 percent from 2010 levels and reduced costs associated with commercial wells by a quarter since 2014, according to Wood Mackenzie.

A Chinese worker measures a pipeline at an offshore oil drilling platform in Qingdao, east China's Shandong province. STR | AFP | Getty Images