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The advantage of the third largest reserves of coalbed methane is poised for Chinese and foreign enterprises to compete for the development of "the first barrel of gold"

China, the third-largest country in terms of coalbed methane (CBM) reserves after Russia and Canada, is witnessing growing interest from both domestic and international coal chemical companies. The large-scale industrialization of CBM resources is now on the horizon, with several key developments taking place across the nation. Due to technological limitations in domestic CBM development, many Chinese companies are partnering with foreign firms that possess advanced technologies and financial resources. This trend has become more prominent in recent years. For example, Guizhou has significantly accelerated its CBM exploration efforts. In September, the province signed a product-sharing agreement with China Coalbed Methane Corporation, the only company authorized for foreign cooperation in the CBM sector, and Canadian Energy Canada Inc., focusing on CBM development in Qingshan District. Meanwhile, Heilongjiang Longmei Mining Group and Hong Kong Zhongjie International, in collaboration with Canada Cathay Oil & Gas, have also entered into a letter of intent to promote CBM production comprehensively. In Yunnan Province, with active government support, China United plans to establish a demonstration site for surface extraction of coal mine methane (CMM), aiming to explore commercial viability. According to Sun Maoyuan, general manager of China United, the company aims to build two CBM production bases by 2010, producing between 1 billion and 1.5 billion cubic meters annually. By 2015, it expects to expand to two or three bases, reaching an annual output of 10 billion cubic meters, which would mark a significant step toward commercial-scale utilization. Shanxi Jinmei Coal Group has taken full advantage of the province's rich CBM reserves, which account for one-third of the national total. By adopting foreign technology, the group has developed its own ground-based CBM extraction system tailored for local conditions. With 2 billion yuan in foreign loans, the project has been fully launched. Currently, the group’s ground pre-drainage wells are operating stably and show potential for commercial use. It is expected that all 150 wells will be operational by year-end, with a gas production capacity of 100 million cubic meters. Over the next five to ten years, the number of wells could reach 2,000, with annual production potentially reaching 2 billion cubic meters. Despite over a decade of exploration, CBM development in China has yet to reach commercial scale due to geological challenges, equipment limitations, and other technical barriers. However, with continuous advancements in science and technology, state-owned coal enterprises are investing heavily in developing CBM technologies suited to China’s unique geological conditions. They are also actively building markets for CBM utilization, gradually overcoming the obstacles that have hindered its growth. As these efforts progress, the future of CBM in China looks increasingly promising.

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