Firm to explore gas resources in Guizhou

China's shale gas output in 2013 stood at 200 million cubic meters, while coal-bed methane production was 3 billion cubic meters, according to the Ministry of Land and Resources.

The country's total natural gas output was 120.9 billion cubic meters. Conventional natural gas production stood at 117.7 billion cubic meters in 2013, the ministry said.

The nation wants to increase the share of its massive reserves of unconventional gas - forms of natural gas such as shale gas and coal-bed methane - in its energy mixture from a mere 3 percent to more than 30 percent of domestic gas supply by 2030.

But CBM development has not been easy. Of 10 pipeline projects scheduled to be completed last year, only two were finished, a Financial Times report said.

Cai Linqing, vice-general manager of East China Engineering Science and Technology Co Ltd, which is involved in engineering projects contracting as well as engineering design, said that the bottleneck lies in the technology of extracting methane from coal beds trapped deep underground.

"There has been no major technology breakthrough in CBM extraction, which limits its development and exploration," he said. "Other factors, such as the cost of drilling wells and lack of funding for early CBM exploration, also need to be considered."

Wu said that unconventional gas is a clean, rich energy resource for China that is in need of governmental support, especially subsidies for fundamental research and commercialization of CBM.

To accelerate the exploration of coal-bed methane in Chinese mines, the Ministry of Finance decided to eliminate the tariffs and value-added taxes formerly charged on equipment and components used to refine the gas in mines. That change took effect in 2011.

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