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China Looks West for CBM Development Boost

The Chinese government is shifting focus to the remote western region of Xinjiang in the hunt for CBM production growth, after a difficult few years trying to develop the resource in the midwest.

Unspectacular progress in Shanxi province, the cradle of CBM exploration in China, and the expansion of the West-East Pipeline network – which connects gas resources in Xinjiang to eastern markets – have prompted the central government to reconsider Xinjiang’s CBM potential.

“The key to successful CBM exploration is to look for the right block. In the United States, CBM breakthroughs were made in places with mid-to-low coal ranks [a measurement of the carbon content of the fuel],” Yao Yaming, a professor at the Xinjiang Institute of Engineering, told Interfax. 

“We’ve conducted general surveys in Xinjiang for the past two years and found that although it has abundant resources; proven reserves are quite small,” said Sun Maoyuan, a CBM industry insider who is helping the central government draft the 13th FYP for CBM.

The province will also serve as a test bed for reforms to promote more outside ownership of PetroChina’s upstream projects, although not before state-owned companies such as Xinjiang’s government and businesses owned by the Xinjiang Production and Construction Corp. have secured prime acreage (see PetroChina parades healthier gas business, 29 August 2014 and PetroChina taps local group to develop Xinjiang oil and gas, 23 September 2014). 

(interfaxenergy.com Edited by Topco)