China's deep coalbed gas push targets 50 tcm reserves as supply diversification deepens
China's deep coalbed gas expansion is reshaping its domestic supply picture, with Beijing targeting a tenfold output increase by 2035.
PetroChina Coalbed Methane Company produced nearly 2 billion cubic meters of deep coalbed gas in 2024, part of a three-year push that has lifted production from the resource to 2.5 billion cubic meters while adding 320 billion cubic meters of cumulative reserves, 77% of which came from deep seams.1
That trajectory matters for Asian LNG markets because China's domestic gas output growth directly shapes its import appetite. JKM (Asian LNG) front-month was at $24.02/MMBtu on Monday (2026-09-07), with Beijing's supply diversification strategy running alongside a broader buildout of pipeline and LNG import infrastructure.1
The National Energy Administration's 2024 landmark achievements list flagged deep coalbed gas as a key driver of China's gas expansion. Zhou Lihong, Executive Director of PetroChina Coalbed Methane Company, said reserves have grown significantly over the past three years, with deep formations accounting for the bulk of additions.1
Beijing's targets are ambitious. By 2025, China's total coalbed gas production is expected to reach 17 billion cubic meters. By 2035, the country aims to confirm 50 trillion cubic meters of deep coalbed gas reserves, with annual production projected to hit 40-50 billion cubic meters.1
That would represent a tenfold increase from current deep coalbed output levels within a decade. The scale of the resource base is not the constraint; the economics of extracting gas from deep, low-permeability coal seams are. PetroChina's progress suggests the technical hurdles are being overcome, but the sector remains capital-intensive.1
The pace of reserve confirmation will be the signal to watch. China has a history of announcing ambitious upstream targets that slip, but coalbed gas has a strategic logic that conventional exploration lacks: it sits inside the coal basins where the country's energy workforce and infrastructure already exist.1
Higher interest rates raise project costs for energy infrastructure, and financing conditions matter for capital-intensive coalbed gas development, according to a market analysis published in June (2026-06-04). The natural gas demand story may be durable, but the path can remain uneven.3
China's coalbed gas push is part of a diversified energy transition strategy that keeps natural gas central while expanding cleaner alternatives. In Southeast Asia, similar thinking is visible: PGN has signed an agreement to supply POME-derived biomethane to NeutraDC's data centre projects in Singapore from 2027, drawing on infrastructure in West Java, while Pertamina and Singapore LNG Corporation develop a Bio-LNG value chain.4
Rising electricity demand across Asia, driven partly by AI data centres, is strengthening the case for gas as transitional power. That demand growth coexists with a technology landscape where energy transition must create commercially viable opportunities rather than depend on subsidy, as Roland Berger's Dieter Billen argued in August (2026-08-04).5,2
The US market shows why gas demand forecasts carry risk. Only about 5% of National Grid utility customers who install heat pumps fully disconnect from the gas system, according to a September (2026-09-03) analysis, meaning utilities must still plan to serve firm customers on peak design days. Gas infrastructure stays in use even as electrification advances.6
Henry Hub front-month was at $2.96/MMBtu on Monday (2026-09-07), reflecting a US market where production growth and LNG export capacity compete for the same molecules. The China story is different: domestic production growth there displaces imports rather than adding to exportable supply.6
What bears watching is whether PetroChina's deep coalbed reserves get confirmed at the pace Zhou's targets imply. Reserve certification in China is often optimistic, and the 2035 production goal of 40-50 billion cubic meters assumes sustained drilling success across multiple basins. Quarterly production updates from PetroChina Coalbed Methane will give the earliest read on whether the trajectory holds. The gap between the 17 billion cubic meters target for 2025 and the roughly 2 billion cubic meters produced from deep seams in 2024 is wide, and it will need to close quickly for the longer-term goals to carry credibility.1