New | Right expertise holds key to success in coal seam gas exploration in China
AAG Energy chairman Stephen Zou sticks with production expansion plans despite rising cheaper imports as gas price reform and cost reduction measures will boost demand and sales
The flood of imported natural gas slated to arrive in China next year will not derail the production expansion plan by one of the pioneers to tap the country’s rich natural gas resources trapped between coal seams, as impending gas price reform and cost reduction measures are expected to lift demand and sales.
Stephen Zou Xiangdong, the chairman and founder of AAG Energy Holdings, said even though geological, industry structure and infrastructure challenges meant coal seam gas development in China had been slow in the past two decades, it could be a lucrative business if the right expertise was deployed to do the groundwork to enhance exploration success.
“The key to success in China’s nascent unconventional energy industry like coal seam gas is that you need to have a long-term perspective, avoid short-term bets on investments and do the necessary groundwork,” he told the South China Morning Post. “You must also have confidence in China’s long-term economic development.”
Founded in 2007, Beijing-based AAG was the first non-state-owned coal-bed methane explorer to receive Beijing’s approval in 2011 to start commercial production of the cleaner fuel. It listed in Hong Kong in June.
The company plans to raise its gross output by 54 per cent to 550 million cubic metres this year after recording growth of 128 per cent last year and 57.6 per cent in 2013. This is even as the industry is expected to miss by a wide margin Beijing’s goal set in 2011 for coal seam gas output to reach 30 billion cubic metres this year.