Sinopec and PetroChina quietly have been beefing up efforts to start producing syngas from coal in the last two years. Coal-to-gas production could potentially outstrip both shale gas and coalbed methane by the end of the current five-year economic plan in 2015, as well as by 2020, according to some estimates. Bernstein is predicting synthetic coal gas production to reach 16 billion cubic meters/year by 2015 and 55 billion cu m/year by 2020, representing 6% and 14%, respectively, of China’s total gas demand. This would be more than the 20.2 billion cu m/year of CBM output the bank expects by 2020. Nomura Research is even more optimistic, forecasting syngas to account for 35% of China’s total gas supply by 2020. It estimates the price of syngas production to average $7-$8/Mcf, much cheaper than the expected $13-$17/Mcf for imported gas and LNG, which would trigger much faster development of syngas projects, particularly in China’s western regions, which are rich in coal. Read more