Twelfth Five-year Coalbed Methane Industry Scale or Double

The Twelfth Five-Year Plan for Development and Utilization of Coalbed Methane, which is being organized by the National Energy Administration, proposes that at the end of the Twelfth Five-Year Plan, China's coalbed methane production will reach 200-240 billion cubic meters, of which 100-110 are for CBM extraction from the ground. Billion cubic meters, underground gas drainage volume is 110-130 billion cubic meters.

Some analysts pointed out that the scale of CBM industry will double in the next five years. At present, China's underground and surface coal seam methane production is 7.5 billion cubic meters, and natural gas replacement ratio is less than 10%. According to calculations, there will be 160 billion cubic meters of natural gas shortages in China in the next five years. If 50% of them are replaced by coal-bed gas, then the extended industrial chain will be counted and the market space driven will be ten times.

In response to such a huge market and investment opportunities, many listed companies have rushed to the beach. Several listed companies, including Hymer Technology, Coal Gasification, Tianke, and Zhunyou, have taken actions.

Industry may double in size

“It is a new star in the new energy industry.” For coalbed methane, analysts from Guojin Securities give such comments. Zhou Dadi, deputy director of the China Energy Research Association, even more bluntly stated that in the current “oil shortage” and “electricity shortage” in China, the development and utilization of coalbed methane has important implications for the entire energy structure.

CBM is a spontaneous self-reserving unconventional natural gas, commonly known as gas, formed during the coalification process that generates coal, and is mainly absorbed in the coal seam and its surrounding rocks in an adsorbed state. Because there is almost no smoke and dust in the combustion process, coalbed methane can be said to be a new energy source with clean, high calorific value, high quality, and broad prospects for development and utilization.

Analysts pointed out: "After the earthquake in Japan, the development of nuclear power was questioned. The contradiction between guaranteeing development and carbon emission reduction will still be resolved by the clean coal industry. The future development of coalbed methane is huge."

At present, China's shallow coal-bed methane resources reserve of 2,000 meters is 36.8 trillion cubic meters, ranking third in the world. It is mainly distributed in North China and Northwest China, with a total of about 10 trillion cubic meters of recoverable resources.

The “12th Five-Year Plan for the Development and Utilization of Coalbed Methane” stated in the compilation states that in the next 5-10 years, the proven geological reserves of coalbed methane will enter a period of rapid growth, and the newly added proven geological reserves by 2015 and 2020 will be worth RMB 1,000 billion. Cubic meters and 200 billion cubic meters.

“The scale of CBM industry will double in the next five years.” Analysts from Guojin Securities pointed out that China currently extracts 7.5 billion cubic meters of coalbed methane underground and underground, and the proportion of natural gas replacement is less than 10%, and the natural gas gap in China will be reduced in the next five years. Up to 160 billion cubic meters, 50% of which will be replaced by coalbed gas, the market will grow more than 10 times.

In 2010, Shanxi Province ranked first in the world in the extraction of coalbed methane, accounting for about one-third of the total. Among them, Shanxi Jinmei Group accounted for two-thirds of the total coalbed methane production in Shanxi Province, which is the development of the coalbed methane industry. The biggest beneficiary.

The “Twelfth Five-Year Plan” CBM Industry Planning put forward by Shanxi Jinmei Coal Group pointed out that by the end of the “Twelfth Five-Year Plan”, 20,000 CBM wells will be newly added to form a total of 12 billion cubic meters per year of CBM extraction capacity. Gas extraction volume reached 10 billion cubic meters/year, utilization of coal bed methane reached 9.7 billion cubic meters/year, and 4 coal bed gas transmission pipelines were constructed to form operations with a compression, pipeline, and liquefaction capacity of 10 million cubic meters per day With a total investment of 40 billion yuan, the annual production and sales amounted to 20 billion yuan, and the annual profit amounted to 2 billion yuan.

In fact, as early as in 2009, Jinmei Coal Group had already obtained subsidies of 61.64 million yuan for national CBM utilization, accumulative construction drilling of 2001, accounting for more than 60% of the country, and extraction of coalbed methane 1.169 billion cubic meters, of which the ground drainage The utilization of 401 million cubic meters, accounting for 68.9% of the total use of the country.

According to experts, the construction of a coalbed methane industrial base can also stimulate the development of related industries such as transportation, steel, cement, chemical industry, electric power, and life services, especially equipment manufacturing for drilling rigs, gas extraction, gas generating units, and monitoring and monitoring equipment.

Strong national policy support

The state has given strong support to the development of coalbed methane. Experts pointed out that the Twelfth Five-Year Plan for Exploitation and Utilization of Coalbed Methane, to be announced within the year, will clearly define the fiscal incentives and incentives for enterprises to extract and use CBM.

Not only national policies, but local governments also give strong support to CBM development. At the meeting of leading cadres in Shanxi Province held on July 29, 2010, Yuan Chunqing, secretary of the Shanxi Provincial Party Committee, proposed to build "Gasification in Shanxi." A person from the Shanxi provincial government pointed out that in June 2010, Shanxi Province made a series of planning arrangements to speed up the process of the development and utilization of the “four gases” such as coalbed methane. “Four gas” refers to coalbed methane, coke oven gas, natural gas, and coal-based natural gas. According to the plan, in 2015, the total supply of “four gases” in Shanxi Province will reach 21.8 billion cubic meters, with a total utilization of 11.1 billion cubic meters; in 2020, the annual supply of “four gases” in Shanxi Province will reach 37.9 billion cubic meters. To achieve full coverage of natural gas, coalbed methane, 119 counties and urban areas, full coverage of traffic trunks, full coverage of key industrial users, and full coverage of key tourist areas.

The development plan of “Gasification Shanxi” includes the formation of 10 billion cubic meters of surface CBM production at the end of the “Twelfth Five-year Plan” and even the “Thirteenth Five-Year Plan” period, providing reliable gas source protection for “Gasification Shanxi”. .

At present, Shanxi has already completed construction of a coal-bed methane pipeline project with a total length of 45.2 kilometers and a gas transmission capacity of 1 billion cubic meters per year. It is building a Jincheng-Changzhi coalbed methane pipeline network with a designed annual gas transmission capacity of 320 million cubic meters. project.

Zhou Dadi pointed out that the overlapping of coal and CBM mineral rights is the key to the urgent need for a solution, and also a conflict between the interests of coal companies and CBM companies. Guojin Securities analysts also stated that the lack of policies, technologies, funds, and the inadequacies in the construction of pipeline networks are the main reasons why China's CBM industry lags behind the United States, Australia, and other countries.

Improvements in related areas are being actively promoted and have more room. The “Notice on Organizing the Application of Financial Subsidy Fund for the Development and Utilization of Coalbed Methane” by the Ministry of Finance shows that China has already started the subsidy for coalbed methane, and has given subsidies of 0.2 yuan per m3 to the extraction of CBM for civil gas and boiler fuel. The Shanxi Jincheng Coal CBM company also pointed out that the current pricing of coal seam gas in Shanxi Province is determined by the Provincial Price Bureau, and the price is slightly lower than that of natural gas, and there is room for further increase in the future.

Listed companies "just around the corner"

The huge space for development of coalbed methane also means that there will be excellent investment opportunities there, and the Nuggets will have a huge space.

"CBM development will bring about very good investment opportunities." Yin Xiaodong, chief analyst of the petrochemical industry at CITIC Securities, pointed out that China has already participated in China United Corporation, Sinopec, China National Petroleum, and large-scale coal companies, and the government has successively introduced them. Breaking many supporting policies such as franchise, tax incentives and financial subsidies will bring huge investment opportunities to the CBM sector.

Guojin Securities analysts believe that although the actual benefits of CBM for various companies cannot be quantified at the moment, the conceptual hype will eventually translate into value investment. The early changes in related stocks such as Tianke, coal gasification, and Sinopec are not No original wood.

He pointed out that there are many listed companies that are benefitting from the development of coalbed methane, and they are currently optimistic about the strategic investment opportunities of coal gasification, Xishan Coal & Power, Lu'an Huaneng, Guoyang Xineng, etc.; in addition, relevant pipeline network construction, technology, Processing and engineering service companies will also benefit, including Tianke, Zhunyou, CNPC, CNOOC, COOEC, and extended construction.

Faced with such a huge investment opportunity, listed companies have already been unable to hold back and began to make a point.

"Our company's main service content is multiphase metering technology, which is mainly used in oilfield development. The company's leadership has taken note of the general trend of coalbed methane development. The company has already done special research on the development of coalbed methane technology." (300084) Dong Dongsheng told reporters at the China Securities Journal.

Haimer Technology is a technological leader in the field of international multiphase metering, and is the leading provider of multiphase measurement solutions for oil fields in the Asian market. The company's main business is to provide customers in the upstream oil and gas industry with multiphase metering products that represent the state of the art, multiphase logging services, and application of multiphase metering products and after-sale technical services. The application of multiphase metrology techniques to the development of new oil and gas fields (especially oceans, desert oil fields and marginal oil fields) can save a lot of investment, shorten the construction period, and simplify production.

Coal gasification recently announced that after Jinmei Coal Group Co., Ltd. hosted a 51% stake in Taiyuan Coal Chemicals Group, the actual controller of the company was changed from China Coal Group to Shanxi Jinmei Coal Group. The company will focus on the construction of coalbed methane development business in Shanxi Province in the next step.

Guo Jin Securities analyst Hao Zheng pointed out that the current coal gasification group has cooperated with the coal bed methane business department of the Jinmei Group in the Gujiao Mining Area. The initial 10 mines successfully exported gas, and the coke oven gas and replacement part of Taiyuan City will be gradually replaced in the long term. natural gas. The Group will also cooperate with Shanxi Coal Group and Shanxi Provincial Government to build a pipeline network in Taiyuan City, replacing all coke oven gas and some natural gas in Taiyuan City with CBM.

The relevant person of Jincheng Coal Group pointed out that according to the idea of ​​“low-concentration gas power generation in the mine and market-based high-concentration coalbed methane utilization,” the Jinmei Coal Group is accelerating the advancement of coalbed methane power plants, coalbed gas compression, coalbed methane liquefaction, and coalbed methane transportation pipeline networks. The construction of relevant projects and the exploitation of coalbed methane have been widely used in many fields such as civil use, automotive fuel, and power generation. The scope of use has been radiated to many regions such as Shaanxi, Henan, Jiangsu, and Zhejiang.

“In July 2010, Jinmei Group and Yangmei Group invested in the formation of Yiquan Blue Flame CBM Co., Ltd., and cooperated with Yangjiao Group Sijiazhuang Mine for CBM surface extraction, and nearly 400 have been drilled in Yangquan Mining Area. Wells, Nissan gas breakthrough 80,000 cubic meters." Jin Coal Group, said the person concerned.

The power of the concept of coalbed methane has already been fully reflected in the trend of the share price of Tianmu Co., a coalbed methane technology provider. Tianke shares reported in the first quarter of 2011 that the company’s main business income and net profit rose by 31.3% and 98.67% respectively in the first quarter, and its earnings per share reached 0.017 yuan; the top ten shareholders of the company included Huaxia Market Fund and Huaxia Strategy under Wang Yawei. Selected funds, which hold 2,009,900 shares and 1,083,700 shares respectively. Guo Jin Securities analysts said that Tianke has always been concerned about the lack of institutional funding, the opportunities brought about by the planning of coal-bed methane is not small, if the good cash and can improve performance, the stock market there is room for growth.

Recently, Tianke Co., Ltd. and the General Electric Co., Ltd. (GE) global R&D center formally signed a cooperation agreement in Chengdu to jointly research and develop low-concentration CBM enrichment technology in the field of power generation, apply variable-pressure gas separation technology to CBM, and increase CBM concentration. . This indicates that the comprehensive utilization of low-level CBM has entered a new application field and is of great significance for reducing the emission of greenhouse gases.

PetroChina and other major oil companies have also focused on the coalbed methane business. CNPC sources pointed out that CNPC is also the main force in the development of CBM networks in the future as the largest CBM development entity in China. In 2010, the Company's newly added proven reserves in the coalbed methane business exceeded 100 billion cubic meters for the first time, and a production capacity of 1.3 billion cubic meters has already been formed.

Xu Jianmei, deputy chief economist of the Planning and Planning Department of PetroChina, pointed out that during the “Twelfth Five-Year Plan” period, CNPC CBM exploration and development will fully accelerate, and by 2015 it will reach a scale of 4 billion cubic meters.