GAIL, Arrow may join China Gas's coal bed methane project

Mumbai: GAIL India Ltd and Australia's Arrow Energy may join coal bed methane (CBM) projects in China, Liu Ming Hui, managing director of China Gas Holdings Ltd. has said.

"GAIL is one of our important shareholders and Arrow has experience in CBM, so we would like to join with them," he told a conference of gas consumers and producers in New Delhi.

Hong Kong-listed China Gas Holdings Limited has some CBM blocks in China, and the company is currently evaluating data, ahead of forming a three-way partnership between China Gas, Gail India and Arrow Energy of Australia.

China Gas is holding talks with GAIL (India) Ltd. for coal bed methane exploration and will decide on an equity stake in the venture soon, Liu said.

China Gas Holdings, which distributes piped gas, also plans to form a venture with Oman Oil Co. to buy liquefied natural gas and liquefied petroleum gas.

The company will decide on the volume of imports from Oman by the second half of the year, Liu said at a conference.

China plans to raise gas consumption in the country to 5.3 per cent of total energy use by 2010 from the current 3 per cent to reduce the reliance on imported oil and cut pollution.

China imported 2.9 million tonnes of LNG last year, according to data released by the Customs General Administration of China.

The company may sell as much as 2 million tons of LPG from a domestic trading company it acquired, Liu said. China Gas bought a 53 per cent stake in Zhejiang Zhongyou Hua Dian Energy Co last month.

China Gas owns 11 LPG terminals, a 15,000-km pipeline network and 3.2 million household customers, Liu said.

The company has also an equal joint venture with Oman Oil to ship natural gas to China from the Middle East.