Energy giants seek coal gas pay-off

ConocoPhillips, British Gas (BG), Shell and other major international energy companies are scrambling to gain a foothold in Asia’s and Australia’s nascent coal bed methane (CBM) business.

CBM is chemically similar to petroleum natural gas and is exploited by tapping methane trapped in the aqueous surface of coal seams. Industry players say the fuel could provide a huge new gas source for power generation, industrial boilers and residential use from the bountiful and relatively tapped coal reserves in Australia, China, India, Indonesia and Vietnam.
While the CBM industry is well established in North America, where it produces 9% of the total gas supply for the US, it is still

in its infancy in Asia. That’s set to change if big international energy players follow through on big new investment plans, particularly in Australia. There the industry is concentrated in the northeastern state of Queensland and has developed rapidly since commercial CBM production started in 1998.

About 7% of Australia’s gas production for domestic markets is now derived from CBM. Now large energy companies have tabled plans to take that business regional through large-scale CBM liquefaction plants geared for exports to Asian markets. Last September, US petroleum major ConocoPhillips outmaneuvered Britain’s BG to sign a US$8 billion CBM-LNG deal with Australian producer Origin.

Asia Times