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You are here: Home » News » Product News » Chinese Natural Gas Demand Moving CBM Exploration Companies Forward

Chinese Natural Gas Demand Moving CBM Exploration Companies Forward

Views:6     Author:xizuan     Publish Time: 2019-01-14      Origin:Site

For decades now, the Coalbed Methane (CBM) has been a significant aspect of the US natural gas market. Several developed countries around the globe today are poised to embark on CBM Exploration and development. This means there would be an establishment of such mining exploration industries that will be of a significant scale to match the level of demand. Significant amongst such countries is China which has recently experienced a surge in Natural Gas Demand. From the cost and expertise perspective, CBM which is a less well known unconventional gas is well prepared to take advantage of the very strong natural gas prices in China as well as other countries across the East, South East Asia, and India.


Exploration-Drilling-Rig


A study on the global market shows that there are some regional price dynamics with the natural gas. However, this is clearly explained by the arbitrage opportunity between the two key players here; East Asia and North America. Again, the drivers for the CBM are localized which contributes further to the dynamics in the global pricing.


The second CBM market established in the world, Australia has a head start on Chinese development as well. There is a great capital expenditure on CBM today, which is aimed at supporting the Coalbed Mining and Liquefied Natural Gas export projects under construction on the coast of Queensland.


The Demand for Natural Gas means that CBM exploration companies need to gear up with mining equipment. These include drill rigs and other heavy equipment/components to ensure an effective and efficient mining process.


In China, the government aims at doubling the average amount of primary energy supply in the form of natural gas. In other to achieve this, there is a need for action on all possible fronts. Now, the Chinese government looks towards their significant reserves of CBM to significantly contribute to their domestic gas exploration and production.


There is a need for the state to support the CBM exploration Companies with a range of subsidies in other to meet the set targets. This requires an increment in the capital expenditure over the coming years. This can be seen in the provision of drill rigs to increasing efficiency in the mining exploration.


Apart from China, other countries such as Indonesia and India are hot spots for capital expenditure in terms of CBM development. In Indonesia, the geology, as well as its domestic natural gas, is responsible for making CBM development a very appetizing project. While in India, the government has conducted four CBM block licensing rounds in a way to encourage and move the CBM exploration Companies forward. So far, it has become evident that there is future for CBM in the nations’ economy.


With the demand for natural gas falling together with the pricing as a result of the shale gas boom, there is a rise in the CBM mining exploration. This means a good opportunity and a push in the forward direction for the CBM exploration companies.


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