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WB lends $80m to N China's methane project

(Xinhua)
Updated: 2009-05-20 21:32

BEIJING -- The World Bank said Wednesday it approved a loan of US$80 million to help China to increase the development and utilization of coal-bed methane to meet a growing demand for energy and reduce greenhouse gases and local air pollutants associated with coal combustion.

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The Shanxi Coal Bed Methane Development and Utilization Project will help north China's Shanxi Province to develop and implement an integrated coal-bed methane development plan and policy framework, said the World Bank.

Methane produced by underground coal seams is called coal-bed methane, which is 21 times more potent than carbon dioxide as a greenhouse gas but also highly explosive. It must be drained during coal mining operations to make working conditions safe.

Shanxi Province produces one quarter of China's coal and has one-third of the country's estimated coal-bed methane resources.

According to the World Bank, the project will finance the exploration and development of about 350 vertical coal-bed methane production wells with an estimated annual production capacity of 250 million cubic meters.

It will also fund the construction of a liquefied natural gas plant consisting of four modules with individual production capacity of 50,000 tonnes per year.