阳煤集团煤层气开发利用情况介绍Introduction of CBM/CMM Development and Utilization in Yangquan Coal Group

山西阳泉煤业（集团）有限责任公司

Shanxi Yangquan Coal Industry Group Co., Ltd

Company Profile

Yangquan Coal (Group) Co., Ltd was formerly Yangquan Mining Bureau founded in January, 1950. Over the past 60-year development, Yangquan Coal Group has become a large-scale state-owned company mainly engaging in coal and coal chemical industry, with a diversified development of a full-range fields of aluminum electricity, real estate, mechanical electricity, trade service, etc, and have accumulated tangible assets of over RMB 80 billion and rich spiritual asset. It’s one of the 13 large-scale coal production bases of the state, and it has 148 subsidiaries including two listed companies namely Guoyang New Energy and Shanxi Sanwei, with 130 thousand employees. In 2008, the total revenue of thecompany reached RMB 34.3billion, ranking 139th place among China’s 500 largest enterprises and 179th among China’s Top 500 enterprises. Its coal production in 2009 reached 44.09million tons, with a gross revenue of over RMB 45 billion.

Basic Information about the CBM Development and Utilization Company

Located at Saiyu Xichuan of Yangquan City, Shanxi Province, CBM Development and Utilization Company of Yangquan Coal Industry Group was established on 7th April 1984. The company was renamed CBM Development and Utilization Branch Company of Yangquan Coal Group on 19th December, 2007. Currently, the Company consists of 10 departments, one office and one center, namely, Gas Supply Department, Production Safety Department, Mechanical and Electrical Service Department, Guishigou Management Department, Business Department, Materials Department, Project Department, CDM Project ManagementDepartment, Security Department, Human Resource Department, General Office, and Sijiazhuang Management Center, with nearly 600 employees.

Current Situation of CBM/CMM Development and Utilization

In 2009, net CBM drainage volume of the working seam in the mainproduction shaft of the company was 69.7033 million m3, and available drainage net volume of the adjacent seams was about 646.397million m3. With enforcement measures of pre-drainage in working seams, each mine has achieved good effects; especially for the working faces of outburst wells, intensity and frequency of outburst has been decreased by over 80% since the measure of pre-drainage has been taken.

In 2009, with the great efforts of the company on management and market, achievement has been made on major economic index such as annualCBM sales. The CBM annual utilization net volume is 142.3868 million m3, with a production output value of RMB 248.6million, which includes 116.77 million from CBM sales, 23.02 million of tax rebate of year 2008, and 42.7million of financial subsidy; and CBM emission income of the year was RMB 66.11million.

Currently, 7 surface gas storage tanks have been built in the company, with a total storage capacity of 180 thousand m3, installed with 33 air compressors of with the total installed capacity of 3500kW, maximum transmission and distribution capacity of 1840m3/min, daily stable transmission and distribution capacity of 1.4million m3, and air supply concentration of 35%~40%. Pipeline of the utilization system is over 520km, built with 53 voltage-regulating stations, benefiting 120 thousand urban residential users and over 300 welfare families, covering almost the whole Yangquan city. Meanwhile, the company has large industrial users of CBM power generation, alumina calcinations, K4 boilers, etc.

Currently, large-scale CBM utilization projects such as CMM liquefaction plant, CNG project, low-concentration CMM purification, low-concentration CMM power generation are under construction. Theseprojects are not only in line with the basic national policy of energy conservation and emission reduction, but also bring substantial economic value and social value to Yangquan Coal Group.

Mining area of Yangquan Coal Group located at Shanxi Qingshui coal basin which has good CBM reservoir conditions with abundant resource, and is one of the regions in China with the greatest potential for CBM development. The total planning coalfield area of the group is 1322.28 km2, with geological coal reserves of 12.044509 billion tons, recoverable reserves of 6.335921 billion tons, CBM resource about 644.8 billion m3, gas content per ton of 7.13～18.17 m3/t, and 17.2 m3/t on average, the absolute gas emission rate of 27.76～324.1m3/min, gas drainage rate of 10.08％～76.27%, pressure of 0.2～1.5Mpa. Its coefficient of gas permeability of coal seam is only 0.017 m2/MPa2·d, with gas natural emission per hundred meter's drilling of 0.004m3/min. The issue of gas has a series impact on the coal mine work safety, and due to the coexistence of fire and gas risks, it is very difficult to carry out the gas control and prevention. Therefore, gas control and prevention is extremely crucial for coal mine work safety of Yangquan Coal Group.

For many years, CBM Development and Utilization of Yangquan Group has long been sticking to the guidance of “Variously developing industrial market, sticking to the domestic and international cooperation, developing from easier and more difficult, from closer and remoter, from surface to underground drainage, combination of location utilization and gas export, ensuring current household use, and gradually expanding other utilizations”. After years of active exploration and practice, the company has made great achievement, and its major practices include:1. To insist to concept innovation, create and implement concrete measures and management systems for introducing foreign funds. In order to introduce capital and technologies, the group has formulated related incentives for cooperation projects, concrete measures for implementation of foreign cooperation, and CBM proposed prices, etc, and worked with Qingshui Lanyan Coalbed Methane Co., Ltd to conduct surface CBM development projects. The company also cooperate with Shanxi Guorui company, Beijing Zancheng International Investment Co., Ltd, and Hangzhou New-Asia Cryogenic Industrial Equipment Co., Ltd, as well as national scientific research institutes and universities to develop CBM high-tech industry.

Second, stick to the principle of CBM comprehensive utilization,create a new phase of transferring the gas as “killer” to “useful resource”, and the “vantage points” effect of CBM development and utilization is obvious.With the large-scale development of CBM resource, in order to change the waste into value resources, and turn the harmful to beneficial, we uphold the development strategy of “maximizing the utilization of CBM resource”, vigorously expand the application fields of CBM resource, and form a large scale of underground CBM drainage and application.

Stable transmission and distribution capacity

CBM/CMM alumina calcinations project The predicted capacity of gas consumption of this project is 300 million m3. The first phase of the project has formally put into operations with alumina output of 40×104t/a, which is the first successful CBM/CMM alumina calcinations project in China. According to the demand of the design technology, we will use CMM drained from No.5 mine of the group. Its first-stage project will consume 36×104m3 (mixing capacity) of CBM per day, and 120 million m3 (mixing capacity) of CBM per year. On the other hand, the second phase of the project (60×104t/a) is scheduled to complete its main construction in 2011. The new phase will consume approximately 180 million m3 of CBM (mixed capacity).

Main calciner

CBM power generation Yangquan Coal has established three CBM power plants, namely, Guishigou CBM power plant, cement plant CBM power plant and Shentangzui CBM power plant. Their respective installed capacity of CBM power generation reaches 11.4MW, 5.4MW, and 12MW. All these three power plants employ the import generator units and have been put into operation since July, 2007.

DNV are verifying the power generating CDM.

Monitoring system of CBM power generation

Household fuels CBM as household fuel is of the advantages of safety, cleaning and high calorific value. Yanquan Group has started the simple use of CBM in 1980s. Now the number of users has reached over 120,000 urban households, covering nearly the whole city.

Industrial gas. In order to realize the energy conservation and emission reduction, to reduce the environmental pollution, over 90% of coal-fuelled facilities in the urban district of Yangquan City have been transformed into gas-fuelled

Scientific research projectsTo drive the CBM industry development by new technologies, Yangquan Group has invested over 20 million RMB to conduct experiments on CBM drainage from surface multi-lateral horizontal well, and CBM liquefaction to replace crude oil, as well as the industrial demonstration project of the “Low quality CMM concentration technology and equipments”.

LCNG gas station successfully experimented in 2008, and the

experiment on refitted diesel engine vehicle

CMM separation and liquefaction technology successfully experimented

in 2008

CBM Surface drainageCurrently, the group has drilled over 400 CBM surface wells and it is estimated that, by the end of 2010, the number of drainage wells will reach 3000.

Coalbed Methane (CBM) Development Plan

Guidelines of CBM Development Plan of the Coal Group“We should actively make full use of CDM Mechanism and a series of national preferential policies on encouraging CBM development and utilization based on the resource advantages, tovariously develop industrial gas market, and stick to the principles of the domestic and international cooperation, sticking to the domestic and international cooperation, developing from easier and more difficult, from closer and remoter, from surface to underground drainage, combination of location utilization and gas export, ensuring current household use, and gradually expanding other utilizations, in order to achieve the order of industrial development of “household use – large-scale industrial gas –power generation – compressed and liquefied gas – chemical industry”.

The concept of CBM Development Plan of the GroupWe should combine on-site utilization with CNG export, to ensure the existing household use and gradually expand other applications, establish the downstream utilization markets of CBM industry, make full use of CBM resources, and reduce methane emissions. Besides, on the basis of ensuring the quantity of current household use, we should also remodel the existing coal boilers, build new gas heating facilities, increase CBM utilization facilities, e.g. vehicle CNG gas station, plan and develop the industrial projects of CBM power generation, CBM liquefaction, CBM compression, gas replacing oil, low concentration methane utilization, VAM utilization and CBM as industrial fuel. According to the real situation of Yangquan mining area and its surrounding areas, thedownstream utilization market of CBM industry with full guarantee should be built to achieve the maximum utilization of CBM resource through various approaches. By the end of year 2015, the production value of CBM should reach RMB 6 billion.

Planed Projects

Currently, in order to accelerate the orderly development of CBMindustry and expand the industry chain of CBM utilization, large-scale CBM liquefaction project, low-concentration methane purification project, VAM utilization project and surface CBM drainage project are under construction.

Here we are sincerely inviting to people and related investment and research institutes to cooperate with us!