Feb. 18, 2007 (China Knowledge) - PetroChina<601857><857><PTR> plans to expand its production capacity for coal-bed methane gas to 650 million cubic meters this year, market sources reported.

The first phase of a methane gas processing plant is expected to be completed this year with an annual capacity of 1 billion cubic meters, according to sources.

The Chinese oil giant has started exploring new energy since April 2006, after the establishment of a special department. It vowed to invest RMB 10 billion (US$1.3 billion) in building facilities for new energy production by 2010.

The burgeoning methane gas market in China has attracted more and more well-known energy firms home and abroad. Last December, Shell has expanded its interests in China by taking control of a pioneering project. The Anglo-Dutch group has bought a 55% equity stake from Verona Development Corporation and will operate the North Shilou project, 150km south-east of Changbei gas field, where Shell is also active in a conventional gas production scheme with PetroChina, according to an earlier report.