AAG reports CBM production growth

14 July 2016, Week 27 Issue 601

Another coal-bed methane (CBM) developer operating in China has reported growth in output.

Hong Kong-based AAG Energy said production at its Panzhuang block in the Qinshui Basin, in Shanxi Province, was now above 1.5 million cubic metres per day. Increased output comes as the company has reduced capital costs per well, AAG said in a statement.

“Compared with 2014 and 2015, the current capital expenditure per well at [the] Panzhuang concession has come down by 29% and 13.9% respectively,” AAG said.

At the firm’s other CBM block in Qinshui Basin, Mabi, production from pilot wells exceeded 100,000 cubic metres per day, it added.

AAG operates the blocks in joint ventures with China National Petroleum Corp. (CNPC) at Mabi and China United Coalbed Methane (CUCBM) at Panzhuang.

The firm’s progress at the Mabi concession comes as a result of the “relentless testing and application of innovative CBM development technologies”, AAG’s co-CEO and COO, Carl Lakey, said. “This continued ramp-up in production should enable Panzhuang to soon exceed its designed annual commercial capacity of 500 [mcm].”

Panzhuang covers an area of 67 square km near the city of Jincheng.

Earlier this year, Green Dragon Gas, which operates CBM concessions in four Chinese provinces, said it had beaten its target for 2015. The company’s gross annual production capacity reached 12.12 billion cubic feet (343.2 mcm), compared with a target of 12 bcf (339.8 mcm).

Green Dragon, which is listed in London but headquartered in Shanxi, operates blocks in Shanxi, Anhui, Jiangxi and Guizhou Provinces.

Chinese CBM development has been slow, with some blaming the pace on a conflict of interest between coal miners and gas producers.

Recent reports have said this may be changing as Beijing seeks to reduce coal production. In Guizhou Province alone last year 183 mines were closed, the state news agency Xinhua reported.

Edited by

Andrew Kemp


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