Greka Group confident about its prospects in China

Global coalbed methane company Greka Group said it is optimistic about its business prospects in China.

As a world leader in coalbed methane development through its London-listed subsidiary Green Dragon Gas, Greka now operates eight coalbed methane blocks across China, covering nearly 7,600 square kilometers.

"We were glad to see one of the blocks we operate in cooperation with China National Petroleum Corp become profitable in 2010, and another block we operate with China National Offshore Oil Corp became profitable five years later, after years of dedication," said Greka Group Chairman and CEO Randeep S. Grewal.

"We have successfully found large volumes of coalbed methane in each of our eight blocks," he said.

The company has been working with Chinese partners in coalbed methane drilling and exploration technology over the past two decades.

China has one of the world's largest coalbed methane reserves, ranking third only after Canada and Russia. The country's average gas content per metric ton of coal is also high.

However, the low moisture content and deep locations of Chinese coalbeds, together with the complex local geology, bring challenges during drilling and production.

Greka has spent nearly 10 years developing a drilling solution called lined faulted brittle coals, an adaptation of the horizontal drilling methods. This approach enables drilling through multiple faults in a single well.

"With all the directional drilling and geo-steering techniques maturing ... Greka will see a third block become profitable by 2019. We expect all of the companies' eight blocks to be profitable by 2020," Grewal said.

According to him, one block Greka took over in Shanxi province 15 years ago is still producing coalbed methane today.

"It's a successful story, and this gives us courage to keep going," he said.

Grewal said he is confident about the prospects for coalbed methane in China, as the country is not only rich in resources, but also determined to reduce air pollution by increasing the proportion of gas in its energy mix.

Figures from Bloomberg Intelligence revealed that natural gas could more than double its share to 14 percent in China's energy mix by 2030.

Na Min, a senior analyst for oil and gas at Bloomberg New Energy Finance, agreed that China's ongoing reform of the natural gas industry is expected to accelerate the coalbed methane sector's development.

"The growing gas demand in northern cities will also provide opportunities for coalbed methane producers," she added.

(China Daily 02/21/2019 page9)