BEIJING: China's coal-producing hub of Shanxi province will open its hydrocarbon resources to coalbed gas exploration and development, state news agency Xinhua reported on Wednesday, citing officials from the provincial land resource department."Companies will compete through auction and other measures to get the rights ... while coal miners will be encouraged to apply for coalbed gas development rights in their current mining concessions," said a Shanxi land resource department official.
Shanxi province aims to upgrade its energy structure by switching from coal to clean energy, in line with Beijing's campaign to clear the nation's air of pollution and smog.
Coalbed gas, or coalbed methane, is a form of unconventional natural gas typically extracted from coal beds and used as a fuel for residential and industrial heating.
In late 2016, China issued a five-year plan (2016-2020) aiming to raise its national coalbed gas output to 10 billion cubic metres (bcm) by 2020, up from 4.4 bcm in 2015.
Coalbed gas development, however, has not made much progress in recent years due to high costs and cheap gas prices.
This past winter, many regions across the country warned of severe gas shortages and soaring gas prices after Beijing ordered millions of houses and industrial plants to convert to gas or electricity heating from coal.
"To ensure gas supplies, China will ramp up gas output and boost the production of unconventional gas such as coalbed gas, shale gas and tight gas," said He Lifeng, chairman of the National Development and Reform Commission, at a news briefing on Tuesday.
Shanxi, China's second-biggest coal producer after Inner Mongolia, 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, said the provincial government in a statement last week.
Shanxi also plans to build more than 10,000 km (6,250 miles) of gas pipelines to bring coal-bed gas to around 70 percent of the province.