CNPC to invest RMB 3 bln in coal gas development

Aug. 11, 2009 (China Knowledge) - China National Petroleum Corp, the country's largest integrated oil and gas company, plans to invest a total of RMB 3 billion in coal gas development this year, said an insider at CNPC, sources reported.

The oil giant intends to focus its development efforts in Qinshui Basin, the Linfeng area, the area near the Yellow River in Shanxi Province and Hancheng, Shaanxi Province.

In Qinshui Basin, CNPC aims to produce 3 billion cubic meters of coal gas by 2010. The first stage of the project, which will have an annual output of 1 billion cu m, will be put into operation at the end of this month.

The investment CNPC will pour in the coal gas sector in 2009 will be about 10 times the amount invested over the past 12 years, said a senior without elaborating. At the end of this year, the proven coal gas reserves of the oil company will be 100 billion cu m. Next year's output is expected to hit 1.5 billion cu m. In addition, CNPC targets an annual output of 3 billion cu m of coal gas by 2010 and 10 billion cu m by 2015.

Reportedly, CNPC has obtained collieries covering an area of 22,000 kilometers and 14 overseas contracts from China United Coalbed Methane Corp Ltd. The remaining assets of China United Coalbed Methane are still held by China Coal Group, the parent of China Coal Energy Co Ltd<601898><1898>.