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Worldwide demand for LNG from coal seam gas is set to increase by 10 per cent a year through 2015, more than five times estimated gains in crude oil, as power producers switch to cleaner fuels, according to Citigroup.
LNG is gas chilled to liquid form for transport by tanker. Coal-seam gas, mostly comprising methane, lies on the surface of coal and can be extracted when pressure on the coal seam is reduced, usually by removing water.
In Australia the sector was now worth A$6 billion, compared with $100 million just five years ago, in spite of reservations about the profitability of the capital-intensive coal seam gas extraction process and the time that it will take for projects to come good.
In New Zealand, Solid Energy has productive coal seam gas pilot wells west of Huntly and will decide later this year whether to launch a commercial project.
