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Will China's CBM Help Make the Next Energy
Billionaire?
by James Finch 30-08-2006 |
page 4 |
Conclusion
By 2020, China hopes CBM can provide up to 10 percent of the country's gas
production. CUCBM will continue to lead China's coalbed methane development.
But, others who are currently developing their production-sharing contracts
could also become strong methane gas suppliers in China.
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Europeans appear to appreciate CBM in China more so than North American funds. A
great deal of western hemisphere funding is earmarked for western Canada's CBM
exploration and development. Bloated gas storage numbers hit the CBM stocks very
hard this past June and caused the sector to disappoint investors.
While CBM companies developing their projects in Alberta or elsewhere in Canada
may have to wait until natural gas prices recover, or become part of the
consolidation process, CBM companies in China are in an entirely different
marketplac e. Aside from being the world's largest producer of coal, China has
massive CBM gas-in-place. Unlike Canada, China is frantically negotiating to
import more natural gas to keep its gas-fired plants running. The addition of
coalbed methane gas would be welcome. According to industry insiders we've
conversed with, China's state-owned CUCBM has been bending over backwards to
make CBM projects in this country come to fruition. Investors should realize
that CBM in China is a completely different world than CBM in Canada.
One industry insider explained to us, "Green Dragon Gas will probably lift up
the entire CBM sector in China." With these three CBM companies already in the
game, another two or three Canadian CBM development companies may soon commence
exploration on their projects. And sooner rather than later, more will join in.
And who knows? Randeep Grewal might join the billionaire's club next year. Of
one thing we are certain, if he does reach that premier status, CUCBM will have
more foreign investment rushing in to capitalize upon China's CBM
production-sharing contracts. James Finch contributes to
StockIntervieww and
other publications. Visit
http://www.stockinterview.com to read all of his archived articles. |
