Coal Seam Methane
From IntFX
Contents |
[edit] Overview
Coal seam methane is typically used for most power generation purposes. Unlike conventional forms of natural gas which are found in sandstone repositories, the coal seam methane is found in coal itself. A form of natural gas, coal seam methane is extracted from coal deposits by using specially created seams for this purpose.
[edit] General uses
Australia remains one of the fourth largest producers of coal. In 2003, Australia accounted for almost 719 million tonnes of coal out of which around 28% was for metallurgical or coking coal and 72% was for thermal or steaming coal – thus accounting for almost 54% and 19% of world trade overall[1] . After oil, coal constitutes about 24% of the worldwide demand for energy. Global coal production has increased by almost 80% over the last 3 decades. The large amount of coal mining in Australia also accounts for the largest per capita greenhouse gas emission in the world.
[edit] Pricing structure
The average cost of coal seam methane as reported by the Williams Coal Seam Gas Royalty Trust (WTU) is around 10.39 USD per 12800 volumes[2] . As of the first quarter of 2002, the average price of hard coking coal imported into Europe was around 45.21 dollars per ton, FOB3. When thermal coal was imported into Asia, it was about 30.43 dollars per ton FOB and hard coking coal imported into Japan was about 39.99 dollars per ton FOB[3] .
[edit] Current consumption trends
It has been predicted that in Eastern Australia alone, the consumption of natural gas is expected to rise at 2.6% per annum. Over the next 25 years the demand in natural gas in Queensland is predicted to be at the rate of 4.3% per annum[4] . In fact going by statistics, natural gas has witnessed the largest leap in terms of growth – from zero in 1970 to 20.5% in the 2004-2005 periods. In Australia the Cooper Eromanga basin in Queensland area is the largest producer of natural gas[4]. However, this resource is depleting rapidly owning to increased demands from commercial, residential and industrial sectors. Therefore, the Bowen Basin represents a good potential for future projects. Even the Surat Basin is a good resource[4].
[edit] Price forecasts
On an average, the prices of natural gas are expected to reach about 6.50 dollars by the end of 2008. This reflects a yearly increase of almost 3.1 percent on average. The weather as well as other factors is expected to play truant on volatile prices of coal seam methane.
[edit] Major producers
Coal seam methane is a fairly recently developed material which has found new takers among the big players. Among the oldest players, Queensland Gas remains the largest producer of coal seam methane. It is expected to raise almost 60 million USD to rev up its gas reserves. Santo’s Cooper Basin remains a hot spot for producing coal seam methane. New South Wales or NSW are fast becoming potential targets at developing coal seam methane – the reason being the majority of coal producing resources that are located here.
[edit] China’s recent rise
China has an estimated reserve of almost 35 trillion cubic meters of coal seam methane. This is as much of the natural gas reserves that China has. Many foreign companies have shown keen interest in harnessing the tremendous coal seam methane reserves in China. However, efforts towards exploration have largely been sporadic and not consistent enough.
