Global Information Inc. would like to present a new market research report, "Coal Seam Gas/ Coal Bed Methane (CSG/CBM) in Asia - Market Analysis, Investment Scenario, Competitive Landscape and Production Forecasts to 2020" by GlobalData.
Asia-Pacific is a major global region in terms of proven (1P) coal reserves. With 265,843 Million Tons (mmt) of 1P reserves, it ranks second after North America. Current Coal Bed Methane (CBM) exploration and development activities in Asia-Pacific are taking place in countries with a high coal resource content, such as Australia, China and India. As of 2011, 1P coal reserves in these three countries accounted for around 95% of coal reserves in the entire region (BP, 2012).
The figure given below illustrates the shares of coal reserves held by key Asian countries in the region as of 2011.
Methane, which has similar properties to natural gas, is extracted from coal seams. The existence of substantial coal reserves in Asian countries provides opportunities for companies to undertake CBM activities.
Australia and China are Regional Leaders in Terms of Coal Seam Gas Activities, Followed by India and Indonesia
Coal Seam Gas (CSG)/CBM activities in the Asia-Pacific region are currently heavily dominated by Australia and China. These countries are clear leaders in terms of the number of blocks leased for exploration, investment, and commercial CBM production. To achieve the goal of establishing a superior export base for natural gas, Australia is undertaking the construction of a number of Liquefied Natural Gas (LNG) liquefaction plants. These are expected to become operational in two to four years and will be aimed at the conversion of CBM to LNG. Geographical proximity to energy-hungry South Asia will provide a good market for Australian LNG exports. In addition to Australia, the countries China, India and Indonesia are also emerging as key sites for CBM activities. All four countries have leased out CBM licenses for exploration. China and India have managed to achieve commercial-scale CBM production. The governments of these countries are moving ahead with major fiscal reforms and production targets in order to encourage CBM activities. The CBM production shares held by the major Asian markets are provided in the figure below.
Rising Gas Demand in Asia to Drive Investment in the CBM Market
Asia-Pacific is a major natural gas market, with the potential to become the largest gas market in the world in future. Some of the most highly industrialized countries in the world are located in the region, such as, Japan, South Korea and China, and some of the most highly populated countries with high consumption such as India and China. Increasing natural gas demand across several Asian countries has led to increased investments being made into the securing of energy sources. In this scenario, unconventional gas has gained substantial prominence, especially CBM and shale gas. As CBM development is driven by the existence of substantial coal reserves, increased investment is being made into the development of this market.
The expected rapid growth of natural gas consumption in key Asian countries has made the development of unconventional gas sources necessary. In order to achieve this, China is aggressively pursuing the development of its shale gas and CBM resources. Australia has already had major success in the development of its CBM resources. Similarly, other Asian countries that possess substantial reserves, such as India, Indonesia and Vietnam, are seeking to develop their CBM resources.
Supporting Fiscal Policies and Government Regulations to Encourage Coal Bed Methane Development in Asia
Driven by increasing natural gas consumption and an urgent need to secure gas sources, a number of countries across Asia are intent upon supporting their domestic CBM industry. Towards this goal, these countries are employing key fiscal policies and government regulations, which are expected to support activities relating to CBM in the region. Queensland in Australia has introduced a gas scheme, which mandates the increased usage of natural gas for power generation. China has provided exemption from import duty for CBM operators, on imports of the machinery used for CBM extraction. CBM operators are also exempt from Value Added Tax (VAT). India has also announced a tax holiday for CBM operations, albeit only for the blocks offered in the last four CBM exploration rounds.
Coal Bed Methane Production in Asia is Estimated to be Around 98 Billion Cubic Meters by 2020
CBM production in Asia is expected to reach about 98 billion cubic meters (bcm) by 2020. Australia is expected to be the largest contributor to this production growth. The country will contribute more than 60% of CBM production in the region by 2020. China and India are also expected to be major contributors to this production.
The figure below illustrates CBM production in Asia between 2013 and 2020.