"China's major equipment for coal-bed methane electricity generation are gas
turbines and internal combustion engines. As a result, existing coal-fired power
plants can be easily rebuilt into coal-bed methane power stations," said Liu
Wenge.
In addition to building power plants, China plans to build two pipelines for
coal-bed gas transmission in the next five years, said Hu Aimei, vice president
of the China United Coal-bed Methane Corporation.
The first pipeline, linking Qinshui County of north China's Shanxi Province
to Bo'ai County of Henan Province, will be connected to the great pipeline
pumping natural gas from energy-rich West to East China. The pipeline is
designed to have an annual gas transmission capacity of one billion cubic
meters.
The second one will transmit coal-bed gas from Songzao of southwestern
Chongqing Municipality to feed the energy demands of Chongqing, said Hu.
"Still under planning, the two pipelines have not got formal permission from
the state government," said Hu Aimei.
Foreign investors
Foreign investors are entering the Chinese coal-bed methane sector as the
Chinese government has set out a series of preferential policies for overseas
investment to enter the methane exploitation sector, including tax rebates.
On April 5, 2006, China United Coal-bed Methane Corporation that enjoys
exclusive rights to cooperate with foreign investors for coal-bed methane
exploitation signed in Beijing a cooperative contract with Orion Energy
International Inc. from the United States, to join hands in the exploitation of
coal-bed methane in a 462-square-kilometer block called Sanjiao, in north
China's Shanxi Province. The area is estimated to have 60 billion cubic meters
of coal-bed methane.
During the five-year exploration phase, Orion Energy International Inc. is
required to shoulder all the risks in the exploration phase of the contract and
adopt advanced exploration technology. Entering the development period, the two
sides will invest in and share the profits in accordance with the proportion of
their respective investments.
"This is the fifth contract that the corporation has signed with foreign
companies so far this year," said Yang Jian, a senior analyst with China United
Coal-bed Methane Corporation.
To date, the corporation has 27 contracts for coal-bed methane exploitation,
including the United States' Chevron and other foreign companies from Britain,
Canada and Australia. The total investment exceeds 1.2 billion yuan.
The corporation will work together with these firms on the exploration,
mining, processing and sale of methane, said Yang Jian, adding that the
exploitation areas involve northern China, northwestern China and northeast
China.
In addition to businesses from foreign countries, Hong Kong? Cregistered
Towngas signed a framework agreement with Shanxi provincial government to
develop local coal-bed methane in July 2006. The US$100-million deal is the
largest coal-bed methane project in China, said Yang Jian.
"Towngas plans to invest a total of 6 billion yuan in the mainland in the
next three years, thus making business in the mainland its major profit growth
point," said Chen Yongjian, president of Towngas.
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