On the 15th, it was learned from the National Energy Administration that the proposed CBM “Twelfth Five-Year Plan” proposes that by 2015, China’s overall CBM extraction target is 21 billion cubic meters, of which ground extraction volume is 9 billion cubic meters. The underground extraction volume is 12 billion cubic meters. This is more than twice the target of the 11th Five-Year Plan. At present, the first draft of the CBM “12th Five-Year Plan” has been completed and submitted for consideration by all parties, and it will be released as soon as July this year.

Subsidy standard or upward adjustment

Relevant departments are currently stepping up efforts to formulate the CBM industry policy, which will further clarify the preferential fiscal and tax incentives for enterprises to explore and use CBM.

As of the end of 2010, China has completed a total of 8.8 billion cubic meters of coalbed methane drainage with a utilization of 3.6 billion cubic meters, and the “Eleventh Five-Year Plan” proposed that “the amount of extraction should reach 10 billion cubic meters, and the utilization volume should reach 80 There is a big difference in the "billion cubic meters" target.

“In the past five years, countries like China’s CBM exploration and utilization countries have proposed a policy similar to '0.2 yuan per cubic meter of subsidized mining enterprise’ and 'one per kWh electricity subsidy’ of 0.25 yuan’. However, at present, this subsidy standard still needs to be improve". The Energy Bureau official said. From the situation reflected by related companies, the mining subsidy mentioned 0.4 yuan/cubic meter, and the CBM power generation subsidy raised to 0.35 yuan/kWh is more in line with the requirements of the company.

Leading companies will benefit

Relevant analysts believe that the target for the Twelfth Five-Year Plan for coal-bed methane will be doubled, and related policies for the development of the state's supporting industries will be announced. The CBM exploration companies such as PetroChina, CNOOC, and Zhunyou will also be involved in Tianmco and Jinji Diesel. The use of coal bed methane recovery and utilization equipment suppliers brings benefits.

Coal gasification announced on the 14th that Jinmei Group had officially hosted a 51% stake in the company and became the actual controller of the company. As one of the leading companies in the field of coalbed methane extraction in China, Jinmei Coal Group has achieved a total of 1.573 billion cubic meters of coalbed methane drainage in 2010, with a utilization rate of 64.4%. The holding of coal gasification, Shanxi Coal Group will further develop the market for the development and utilization of coalbed methane. Analysts pointed out that Jinmei Group had previously planned for the overall listing, and CBM is one of the main businesses of the company's listing.

PetroChina has also frequently deployed on coalbed methane extraction recently. According to public information, in 2011, CNPC’s coalbed methane production plans will reach 600 million cubic meters, and by the end of the “Twelfth Five-Year Plan”, its planned target is 4 billion cubic meters. In the upcoming "Twelfth Five-Year Plan" industry plan, it accounts for nearly one-fifth of the total. Not only that, CNPC is also focusing on the layout of the CBM network. At the end of March, PetroChina Pipeline Bureau and Shanxi International Power Co., Ltd. signed a cooperation framework agreement on coalbed methane pipeline network project in Shanxi Province in Taiyuan, aiming to lay a coalbed methane pipeline network in Shanxi Province where coal bed methane resources account for more than one-third of the country's total.

Earlier this year, CNOOC acquired 50% of China United Coalbed Methane Company and formally joined the ranks of CBM exploration. The market generally believes that the 27 blocks currently owned by China United Coal and the proven 50 billion cubic meters of CBM resources will lay a solid foundation for CNOOC's CBM extraction business.

In addition, with the increasing exploitation of various enterprises, some technology and equipment suppliers who are committed to CBM extraction and power generation will benefit, such as Tianke Co., Ltd. and Petroleum Jichai in the field of coal bed methane technology equipment. The business is expected to continue to grow.

However, there are risks in CBM exploration and development. At present, there are many companies in the exploration field in China that have caused investment in the early stage due to low mining success rate, which is worthy of investors' attention.

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