Investment Guide to Coalbed Methane Development in Fengcheng CMA 1 Introduction Fengcheng Coal Mining Administration (CMA) is a national large ent erprise, belonging to the Coal Ministry. It is located in Jiangxi Prov ince, including east and west mining areas, with a total area of 280 k mª¬2, transportation and communication there are very convenient. Now the CMA employs 40,000 people, with a fixed assets of 420 million RMB yuan, coal production amounts to 3 million tons, producing more than 1 20 products, and annual industrial output reaches 600 million RMB yuan . The west mining area of Fengchen CMA was constructed in 1958, now there are 4 main mines mining B4 coal seam of upper Permian Longtan f ormation. The coal seam has a simple structure, classified as gentle-d ip individual one, with an average thickness of 2ª±25m. Coal reserves of B4 seam from level -450m to -125m are 166 Mt, containing 4ª±5 to 5 ª±0 billion mª¬3 of coalbed methane, of which, recoverable coalbed me thane amounts to 1ª±5 billion mª¬3. In recent years, the CMA recovered coalbed gas by in-seam borehole . From 1984 to 1994, gas recovered for residential use totaled 80 mill ion mª¬3, supplying 8,000 households in the CMA. In early 1994, China National Petroleum Corporation drilled a exploration borehole in the c enter of Qujiang mine field of the CMA, with a gas production reaching more than 2000 mª¬3/d, and drainage radius 350m. During ignition test , the height of coalbed methane flame reached 3ª±5m, presaging rich re sources and great developmental potential. The CMA plans to built a ca rbon black plant with an annual production of 670 t in 1996, and buil d a formaldehyde plant with a capacity of 1000t/a. When the Qujiang mi ne enters into full operation (0ª±9 Mt/a) by 2000, its coalbed methane can be supplied to the power plant of the CMA and Fengcheng power pla nt. Method for gas recovery: drill a large diameter vertical well from surface to coal, and then drill cross-measure boreholes around the w ell, and also layout boreholes in coal drift. Methods for coalbed methane: pre-drainage, drainage while driving and drainage while mining. 2 Economic Estimation (1) Cost Estimation The cost estimation of coalbed methane project is 50 million RMB yuan, including costs for gas drainage station, storage tank, pipeline , carbon black plant and formaldehyde plant etc. (2) Economic Benefit Gas production is estimated at 251ª±34 million mª¬3 ( gas mixture) from 1996 to 2001, if the price of the gas is set at 0ª±30 Yuan/mª¬3 , and its sales volume will be 64ª±11 million RMB yuan. In terms of heating value, 1ª±5 mª¬3 of coalbed methane equal to 1kg of coal equivalent, therefore using 251ª±34 million mª¬3 coalbed methane means saving 1ª±67 Mt of standard coal. It is estimated that the income from coalbed methane development a nd utilization ma exceed the total cost, in addition, 16ª±86 million R MB yuan of earning may be obtained. In general, Hexi mining area of Fengcheng has a great potential f or coalbed methane development.