Asia's coal seam gas projects charge ahead  

Reuters has a report on Asian efforts to expand production of coal seam gas - Asia's coal seam gas projects charge ahead, China leads.

Projects to exploit coal-bed methane (CBM), once the bane of miners, are surging in Asia, with China out front as it strives to find ways of satisfying its prodigious appetite for energy.

Industry players gathered at a conference in Singapore this week to explore opportunities in a region where CBM is in its infancy, except for Australia, whose coal seam gas industry has flourished over the past decade.

While some CBM projects in the United States have shut down, discouraged by very low gas prices, in Asia, the focus is on conversion of CBM to LNG and it will be priced using traditional Asian LNG formulas linked to oil, Tony Regan, a consultant with Tri-Zen International, said.

"Sponsors are taking a long-term view -- they expect that oil prices will continue to increase, and therefore the Australian CBM projects are still moving ahead. Most are still at the reserve development stage and are either proving up reserves or buying them," added Regan.

China, the world's second-biggest energy user after the United States, is eager to develop CBM into an alternative energy source to drive its rapid industralisation.

"Gas consumption in China is rising at a rapid rate. We see potential, explosive growth of CBM in China," said Frank C. Ingriselli, chief executive of Pacific Asia Petroleum.

The country extracted four billion cubic metres (bcm) of CBM in 2006, and is expected to pump up 10 bcm by 2010, besides further raising 300 bcm of proven CBM reserves.