China yesterday set up the China United Coalbed Methane National Engineering Research Center in a move to boost the coalbed methane (CBM) industry.

With a registered capital of 76 million yuan, the center is co-funded by six companies: China United Coalbed Methane Corp Ltd (CUCBM), PetroChina, Sinopec, Huaibei Mining Group, China University of Geosciences (Beijing) and Beijing Orion Co Ltd.

With the center, China will quicken its pace of CBM development, which has components similar to natural gas.

As a practical and reliable alternative energy source, CBM will relieve China's rising energy demand as well as reduce the number of gas explosions in coal mines, said Liu Yanrong, an official with the National Development and Reform Commission (NDRC).

"In the next two to three years we will formulate some regulations for the nation's CBM industry, we will also develop advanced technologies for the industry with our own intellectual property," said Hu Aimei, the new center's general manager.

China is still in the early stages of CBM development. Last year, the NDRC, China's top economic planner, drafted a five-year plan for the CBM industry. According to this blueprint, China is to increase its annual CBM output to 10 billion cubic meters by 2010.

The nation started to develop CBM in the 1990s. From 2004, China has seen rapid growth in its CBM industry. By the end of 2006, the country had drilled over 1,400 CBM wells.

In 2005 and 2006, China drilled as many CBM wells as it did between 1990 and 2004, said Sun Maoyuan, general manager of CUCBM.

Located to the southeast of Shanxi Province, Qinshui basin has become the first CBM production base in China. This year CUCBM and PetroChina have together built a production facility with a capacity of 1 billion cubic meters per year in the basin.

CUCBM this month found another large CBM block in Hancheng in Northwest China's Shaanxi Province, with a proven reserve of 5 billion cubic meters.