China and Canada will cooperate in exploiting the energy potential of methane from China's coal beds.

The Ministry of Foreign Trade and Economic Cooperation has signed a memorandum of understanding on China's coal-bed methane technology development and carbon dioxide sequestration project.

The project aims to effectively exploit coal-bed methane, a kind of clean energy, while storing carbon dioxide, a greenhouse gas, in unminable deep coal beds in China's poverty-stricken interior.

The Canadian side will transfer advanced technology for the project, which is also devoted to establishing sustainable economic links between coalbed methane-related industries of the two countries.

Repeated small- and full-scale pilot tests will be carried out at different sites to develop commercial coal-bed methane production and carbon dioxide storage and help Chinese technicians master the technology, which is said to have great potential for developing coal-bed methane resources that cannot be exploited by conventional means.

The total project budget includes five million Canadian dollars from Canada and 25 million yuan from China. A Canadian executive agency, comprising the Canada Alberta Research Council, Canada Computer Modeling Group Ltd. and Canada Sproule International Ltd., will make the investment.

The China United Coal-bed Methane Corporation Ltd. has been designated to be responsible for the project for the Chinese side and which will provide geological, hydro-geological and geophysical data and other necessary materials.

The company now plays a leading role in the development of China's fledgling coal-bed methane industry. It has exclusive rights for the exploration, development and production of China's coal-bed methane resources in cooperation with foreign enterprises.

To date, the company has signed 11 production sharing contracts for joint exploitation of China's coal-bed methane resources with six foreign oil companies.

(Xinhua News Agency March 30, 2002)