PetroChina's Deep Coalbed Gas Hit 2 Billion Cubic Metres as Hormuz Cuts China's Crude Imports 20%

PetroChina's Deep Coalbed Gas Hit 2 Billion Cubic Metres as Hormuz Cuts China's Crude Imports 20% China is accelerating domestic gas production while coal power rises for a fourth straight month, reshaping its energy import dependence in real time. China's National Energy Administration ranked the rapid scale-up of deep coalbed gas production among the country's top ten exploration achievements for 2024. Output reached 2.5 billion cubic metres within three years of development. PetroChina Coalbed Methane Company alone produced nearly 2 billion cubic metres last year. Small numbers in the context of total Chinese gas demand. But the growth rate signals a strategic pivot that the Hormuz crisis has accelerated.² That matters because China's seaborne energy imports are under sustained pressure. Centre for Research on Energy and Clean Air data show that in April, Hormuz shipping disruptions pushed crude oil imports down roughly 20% year-on-year and natural gas imports down about 13%. The fossil fuel crunch added direct pressure on the chemical industry and forced the power sector back toward coal.³ Coal power generation rose for the fourth consecutive month. Total power generation climbed an estimated 6.6% year-on-year in April, but weak wind conditions, subdued solar output and extended nuclear refuelling outages meant coal carried the incremental load. Thermal power commissioning in the first quarter surged more than 160% year-on-year, reaching a record. China is building coal plants faster than at any point in recent years.³ The renewable expansion has not stopped. Wind power capacity additions rose 8%. But solar additions fell 31% year-on-year from a high base, and solar cell production dropped 25.6%, reflecting weaker domestic installations and a slight export pullback. The import squeeze is redirecting capital toward energy sources that do not depend on maritime chokepoints. Deep coalbed gas, domestic coal, onshore wind all qualify. Seaborne LNG does not.³ Zhou Lihong, executive director of PetroChina Coalbed Methane Company, said China's coalbed methane reserves had grown by a cumulative 320 billion cubic metres over three years, with 77% from deep formations. By 2025, total coalbed gas production is expected to reach 17 billion cubic metres. The 2035 target is more ambitious: confirming 50 trillion cubic metres of reserves and reaching annual output of 40 to 50 billion cubic metres. At that scale, deep coalbed gas would represent a meaningful share of domestic supply.² China's coal import dependence had already been falling before Hormuz. Customs data showed coal imports dropped 6% year-on-year in March 2025 to 38.73 million tonnes, a historic low. Domestic production surged while prices fell to four-year lows. Analysts attributed the shift to narrowing import profit margins, port inventory surpluses and what they described as a strategic pivot toward self-sufficiency.⁵ Official data showed thermal generation ticked up 1.5% in 2024, defying expectations that coal was peaking. Growth slowed to the lowest rate in nine years excluding the pandemic period, but the direction stayed upward. Overall power demand grew 4.6%. Greenpeace analysts had said renewable power could meet all of China's new demand growth in 2025. The Hormuz disruption has overwritten that projection.⁴ The Russia-China gas relationship provides context. The Power of Siberia pipeline represents a $400 billion, 30-year commitment, with Russia investing some $55 billion in infrastructure. But the much larger Power of Siberia 2 has stalled. Beijing is not waiting for Moscow to solve its gas supply problem.¹ The number to watch is whether PetroChina's coalbed gas ramp sustains through 2026. Every billion cubic metres of domestic production that displaces an LNG cargo is a cargo that does not need to transit Hormuz. If the 17 billion cubic metre target for 2025 is met, China will have quietly built a domestic gas supply source larger than several mid-sized LNG import contracts, at a fraction of the geopolitical risk.