China's 15th Five-Year Plan Targets Deep Coalbed Gas and Synthetic Fuel Output to Reduce LNG Import Reliance
Beijing projects 40-50 billion cubic meters of deep coalbed gas annually by 2035, a target that could meaningfully alter Asia-Pacific LNG demand patterns.
Rystad Energy reported on Tuesday (2026-08-11) that China's coal-to-gas industry is on track to triple output by 2030, a trajectory tied to supply mandates embedded in Beijing's 15th Five-Year Plan for oil and natural gas development. China operates the world's only large-scale coal-to-gas industry. No other nation has built synthetic gas from coal at commercial volume.5
The plan's domestic ambitions reach beyond synthetic fuels. China's National Energy Administration designated deep coalbed gas one of the top 10 landmark achievements in national oil and gas exploration for 2024, citing output growth to 2.5 billion cubic meters over just three years of rapid field development.1
The reserve base has expanded quickly. Zhou Lihong, Executive Director of PetroChina Coalbed Methane Company, reported that China's coalbed methane resources grew by a cumulative 320 billion cubic meters over the past three years, with 77% of that addition drawn from deep formations. PetroChina's coalbed methane unit produced close to 2 billion cubic meters of deep coalbed gas in 2024 alone.1
Production targets step up sharply through the plan period. China's total coalbed-derived gas output is projected to reach 17 billion cubic meters in 2025. Looking to 2035, Beijing is targeting confirmed reserves of 50 trillion cubic meters, with annual deep coalbed production of 40 to 50 billion cubic meters — a figure that, if realised, would make deep coalbed gas a primary pillar of China's domestic gas supply rather than a supplementary source.1
Asian LNG traders are tracking the build-out closely. JKM spot prices were quoted at $21.61 per MMBtu on Tuesday (2026-08-18). China's periodic demand spikes have driven that benchmark sharply higher in past winters. A sustained domestic supply ramp of the scale Beijing is projecting could reduce the frequency and severity of those import surges. But the targets remain years from verification.5
Beijing has been explicit about the strategic rationale. Rystad noted that China's coal-to-gas programme is driven partly by the need to insulate domestic supply from geopolitically vulnerable import routes, placing supply security above synthetic gas economics. No source in this packet provides a verified production cost for Chinese CTG output, which leaves direct comparisons with LNG import costs on uncertain ground.5
Coal demand itself faces its own ceiling. China's National Development and Reform Commission and NEA issued a development plan on Wednesday (2026-08-12), reported by Xinhua, targeting a modern coal industry by 2030 with consumption expected to peak by that date. Expanding coal-to-gas and capping coal combustion are not contradictory under this design: the feedstock volumes directed into synthetic gas synthesis sit in a separate accounting category from power-sector and industrial burning.6
China's oil and gas majors are simultaneously reorienting capital toward renewables. China Daily reported in May (2026-05-20) that state-owned energy companies are accelerating their shift toward clean power to meet dual carbon targets. A separate Asian Power report from late July (2026-07-28) put China's total renewable power capacity target at 3.5 billion kilowatts by 2030, with wind and solar expected to exceed 2.8 billion kilowatts generating around 6 trillion kilowatt-hours annually. The gas supply push and the renewables pivot are running on parallel tracks within the same overarching plan.3,4
PetroChina's quarterly report filed in July (2026-07-01) showed the company cutting gas procurement costs and expanding direct sales to end users rather than relying on spot purchases. A sustained increase in domestic coalbed and synthetic gas output would reduce the company's need for short-term import volumes, though PetroChina has not disclosed a numerical target for import substitution.2
The nearest test of the plan's credibility comes from the 2025 coalbed gas output figure of 17 billion cubic meters. That projection derives from a single source and has not been independently confirmed elsewhere in this packet. Hitting it would require output to rise more than eightfold against PetroChina's 2024 deep coalbed production figure, across formations that were largely uncommercial just a few years ago. Production data from China's NEA due over the coming months will be the first concrete read on whether Beijing's targets are tracking reality.1