Natural Gas Market Coal Seam Gas to Stir Up Asia's Natural Gas Market

Editor: Dominik Stephan

The ever–increasing energy hunger could see yet another unconventional gas source emerging from the shadows: Coal seam gas, virtually identical to natural gas, could stir up gas markets. Now analysts see huge possibilities for coal seam gas, especially in Asia–Pacific...

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Coal seam gas or coal bed methane (CBM) has similar properties to common natural gas.
Coal seam gas or coal bed methane (CBM) has similar properties to common natural gas.
(Picture: PROCESS)

London/United Kingdom – Unconventional gas is becoming increasingly popular across the Asia–Pacific, as demand for natural gas grows throughout the region’s major industrialised nations, states a new report from Global Data. Coal Bed Methane (CBM), otherwise known as Coal Seam Gas (CSG), which has similar properties to natural gas, is extracted from coal seams and represents an important unconventional source of gas.

With its emerging economies and enormous population, Asia–Pacific could well become the largest market for natural gas, the analysts believe. The existence of substantial coal reserves, particularly in Australia, China and India, provides opportunities for companies to undertake CBM exploration and development activities. The region holds 265,843 Million tons (mmt) of proven coal reserves as of 2011, leading the region to rank second after North America in global reserves.

CBM Development Schemes Already Under Way in China and India

With highly industrialised nations such as Japan, South Korea and China, along with some of the most highly populated countries with high consumption rates, such as India, Asia's hunger for energy is increasing dramatically. If this trend continues, unconventional natural gas could become a vital fuel and raw material for chemicals or fertilizers in the region, analysts expect.

China has just begun to aggressively develop its CBM resources, while other Asian countries such as India, Indonesia and Vietnam begin to seek out similar opportunities. Queensland in Australia has introduced a gas scheme which mandates the increased usage of natural gas for power generation, and China has provided CBM operators exemption from Value Added Tax (VAT), and exemption from import duty for machinery used for CBM extraction. India has also announced a tax holiday for CBM operations, albeit only for the blocks offered in the last four CBM exploration blocks award rounds.

More about the recent gas boom in Asia? Read also Natural Gas Could Gradually Replace Crude Oil