Surge Projected in China's CBM Production
China, the world’s biggest energy consumer, may increase annual production of coal-bed methane by as much as 20-fold by 2015 compared with 2009 to double the use of the cleaner-burning gas in its energy mix, said Eurasia Group.
The nation may target to produce 20 billion cubic meters by then compared with more than 1 billion cubic meters in 2009, analysts led by Washington D.C.-based Damien Ma wrote in a report.
China National Petroleum Corp., the country’s largest energy company, said on Nov. 19 it plans to produce 4.5 billion cubic meters of the fuel by 2015.
China is seeking to double the use of natural gas to about 8 percent of energy consumption by 2015 to help cut reliance on more polluting oil and coal. The country may hold about 37 trillion cubic meters of coal-bed methane, and gas producers including PetroChina Co. are currently tapping only 185 billion cubic meters of proven reserves, the New York-based consultant said in the report.
“Coal-bed methane production has progressed at an anemic pace to date,” the Eurasia analysts said. “But the 12th five- year plan’s notable focus on significantly ramping up natural gas in the energy mix is likely to facilitate meaningful expansion of coal-bed methane in the medium term.”
China may hold as much as 380 trillion cubic meters of unconventional gas, including coal-bed methane, tight gas and shale gas, about 10 times the potential reserves of conventional gas, according to CNPC.
China United Coalbed Methane Co. will start building a 1,000-kilometer pipeline from Shanxi in 2012 to central Chinese provinces, the analysts said. The project, which involves private capital, will pave the way for more competitive pipeline options, they said.
The government may also increase subsidies for coal-bed methane consumption and production in the next five years, the analysts said. Beijing currently offers a 0.2 yuan subsidy for each cubic meter of production, according to the report.
China’s gas demand may rise to 230 billion cubic meters in 2015 from 130 billion cubic meters this year, CNPC said on Jan. 20. Domestic gas production may rise 11 percent to 105 billion cubic meters this year, while imports may exceed 30 billion cubic meters, the parent of PetroChina said then.
Source: Bloomberg