CNPC withdraws from CUCMC, sets up new CBM unit

China National Petroleum Corp. (CNPC) has officially withdrawn a coal-bed methane (CBM) joint venture with China National Coal Group Corp. (China Coal), in an effort to forge its own partnerships and position in the Chinese CBM sector, China Business News reported Thursday.

The joint venture China United Coalbed Methane, approved and established by the State Council in March 1996, has the exclusive management right of exploiting CBM resource with international cooperation and mainly deals in the prospecting, development, production, transportation, sales, and utilization of CBM resources.

CNPC registered a 1-billion-yuan CBM company in September, and plans to launch the company formally once agreements reached with China Coal on stock right, exploitation right, exclusive right to cooperate with foreign partners, and other relevant issues.

An insider disclosed that the new CBM company will improve production capacity to 500 million cubic meters in two years, and reach 3 billion cubic meters by 2010, half of which would be contributed by Qinshui Basin in Shanxi province.

China is rich in CBM resources, and its CBM reserves are equivalent to those of natural gas. The total reserves of CBM are 36,800 billion cubic meters, among which the minable CBM within the depth of 1,500 meters would be 10,900 billion cubic meters, experts said.