Domestic gas companies will be allowed to sign more global
cooperation deals in a move designed to channel funds and
technology into China's gas industry.
The State Council has revised a regulation, allowing more
"State-designated" companies to set up ventures with foreign
partners to jointly explore methane trapped in coal seams.
The revised rule, known as the Regulation for Joint Exploration
of Onshore Oil, took effect Monday with the aim to boost clean fuel
output.
China United Coal-bed Methane Corp (CUCMC) used to be the only
company allowed to enter into such ventures, based on a 2001
version of the regulation.
"The move will be a shot in the arm for coal-bed methane
exploration and production in China, because it will usher in more
funds and advanced technology," said Huang Shengchu, director of
the China Coal Information Institute.
Many mining companies were opposed to CUCMC's monopoly on
foreign-funded coal-bed methane extraction, said Huang. "With the
deregulation of the market, that segment will develop further,"
said Huang.
CUCMC, however, will remain the market leader, with a lead over
potential competitors.
"The new regulation will not affect our ongoing projects. And we
will continue to tap new resources around the country this year,"
Sun Maoyuan, general manager of CUCMC, told China
Daily.
CUCMC will remain the only firm with foreign partners tapping
coal-bed methane for the time being, because "it takes time for the
State to let in new players", Sun stressed.
"To further tap coal-bed methane, the State will bring a few new
players into the field to test the water. But our potential
competitors simply do not boast as big reserves as us, and it will
take time for them to develop," Sun added.
Asia American Gas Inc and CUCMC recently won government approval
to produce 500 million cubic meters of gas annually in Shanxi
Province.
According to statistics from the China Coal Information
Institute, China boasts a 37 trillion cubic-meter reserve of
coal-bed methane, the third largest in the world, next only to
Russia and Canada and equivalent to 45 billion tons of standard
coal.
More than 600 coal-bed methane wells have been sunk across the
country to date, most of them operated by CUCMC and its shareholder
China National Petroleum Corporation.
(China Daily September 25, 2007)
