BEIJING – Shanxi province's state-run coal mining business plans to increase coalbed methane (CBM) output by a quarter this year, an official told Reuters on Friday, as China's second-largest coal-producing region looks to boost clean fuel output.
That comes in the wake of a push by Beijing to crack down on pollution through steps such as switching millions of households to gas for heating.
The company will add 200 million cubic metres of output this year, bringing its total capacity to one-billion cubic metres (bcm), said Tian Yongdong, general manager of Shanxi Blue Flame Group, a subsidiary of Shanxi Jincheng Anthracite Mining Group Co.
"Our production increase is responding to Shanxi's policy of promoting clean energy and securing China's energy safety," said Tian, speaking on the sidelines of China's annual Parliament session.
As part of its "energy structure upgrade", Shanxi vowed to reduce dependence on coal mining and boost non-coal businesses such as high-technology and tourism.
Shanxi province plans to prove coalbed gas reserves of 1.1-trillion to 1.4-trillion cubic metres and reach an annual output of 20 bcm by the end of 2020.
Last year, the province churned out 4.5 bcm of CBM, accounting for more than 90% of the country's total output.
"The gas supply crunch last winter offered a good opportunity for the CBM industry," said Tian, referring to shortages of the fuel in the face of ferocious cold spells.
In 2016, China issued a five-year plan aiming to raise its national coalbed gas output to 10 billion cubic metres (bcm) by the end of this decade, up from 4.4 bcm in 2015.
However, Liu Feng, mayor of Jincheng city in Shanxi, warned that target may be difficult to hit, saying that state companies should ramp up production and that the market should be open to more private capital. Jincheng produced 3.5 bcm of CBM in 2018.
Last week, Shanxi said it would encourage more market players to compete for CBM exploration and development rights through auction, while pushing forward mergers and acquisitions at state-owned enterprises to streamline the CBM industry.