China to fuel coal-bed methane efforts

China will build three to five big coal-bed methane production bases over five to 10 years as well as encourage coal and petroleum companies to set up specialized units to quicken development of the industry.

The methane bases, which include exploration and production, processing and transport, will be built in Qinshui Basin in Shanxi Province and Ordos Basin in Inner Mongolia by 2015, according to a draft industry policy released by the National Energy Administration yesterday as it sought public opinion.

Besides the planned bases in Qinshui and Ordos, China will also boost exploration in regions and provinces including Xinjiang, Liaoning, Heilongjiang, Sichuan, Guizhou and Yunnan, according to the policy.

Coal-bed methane is natural gas extracted from coal beds.

China has recently deepened efforts to boost development of unconventional gas resources, including coal-bed methane, shale gas and tight gas, to trim reliance on oil and coal and to improve the environment.

The government has doubled subsidies for coal-bed methane production and in late 2011 unveiled an annual output target of 30 billion cubic meters by 2015. But last year's output rose to 12.5 billion cubic meters from 11.5 billion cubic meters in 2011, leading to concerns the 2015 target may not be met.

China will urge big coal and oil and gas companies to form coal-bed methane units and allow small firms and foreign entities to join in the development.