An overview of coalbed methane (CBM) resources, development technology, and project economics — with a focus on the Qinshui Basin, China's most mature CBM production region.
Learn moreCoalbed methane is natural gas adsorbed onto the internal surfaces of coal. Unlike conventional gas, it is held in place by reservoir pressure rather than a structural trap — production works by pumping water out of the coal seam to lower pressure, which releases the gas.
Over 90% of the gas is adsorbed in coal micropores. Recovery requires depressurization through sustained dewatering, which is why CBM wells ramp up slowly rather than peaking on day one.
Chinese CBM reservoirs are typically high-rank coals with permeability below 1 mD. Hydraulic fracturing and horizontal drilling are essential to achieve commercial flow rates.
Extracting methane before or during coal mining reduces mine explosion risk and captures a potent greenhouse gas, turning a safety hazard into pipeline-quality fuel.
Located in southern Shanxi Province, the Qinshui Basin is the most commercially developed CBM basin in China, hosting the Panzhuang, Fanzhuang, Zhengzhuang, and Panhe fields.
| Parameter | Typical value |
|---|---|
| Coal rank | High rank (anthracite to semi-anthracite) |
| Gas content | 6–30 m³/t (average ~20 m³/t in the south) |
| Porosity | ~5% average |
| Permeability | Low — sub-millidarcy, stress sensitive |
| Main target seams | Pennsylvanian–Permian No. 3 and No. 15 coals |
| Development frontier | Mid-deep seams below 1,000 m burial depth |
A modern horizontal well in the Qinshui Basin goes through four main stages from drilling to peak production.
A horizontal lateral of 1,000–2,000 m is drilled along the coal seam and completed with casing or screen pipe. Two-string well designs and "well factory" pad drilling have cut cycles and cost substantially.
Staged fracturing pumps high-pressure fluid through perforations to crack the coal, then packs the fractures with sand proppant. Modern large-volume designs use 2,000 m³ of fluid and 150 m³ of sand per stage at 15 m³/min.
Pumps lift water from the seam to lower reservoir pressure below the gas desorption threshold. Gas typically appears within 1–3 months in good blocks, but production is minimal during this phase.
Gas rate climbs as the depressurized area expands. Modern mid-deep horizontal wells have reached 18,000+ m³/d, followed by a multi-year stable production plateau.
Indicative figures for a horizontal well at roughly 1,500 m depth with large-volume staged fracturing, based on published field data and typical price assumptions.
| Scenario | Capex | Peak rate | Realized price | Simple payback |
|---|---|---|---|---|
| Conservative | ¥25M | 10,000 m³/d | ¥1.2/m³ | ~7.6 years |
| Base case | ¥18M | 15,000 m³/d | ¥1.5/m³ | ~2.9 years |
| Optimistic | ¥15M | 18,000 m³/d | ¥1.8/m³ | ~1.7 years |