Pricing

Coal bed methane pricing in China is deregulated, but subject to guidance by the The National Development and Reform Commission. The NDRC establishes the well head price for each gas field and pipeline tariff depending on the destination of the gas, for domestic, industrial or fertilise use. Prices for bulk sales made at the city gate to the industrial market are negotiable but subject to guidance by NDRC.

Downstream of the city-gate the gas is distributed by a nominated city gas company. Prices are set by the local authority and vary depending whether the end user is residential, industrial, commercial, public service or for transportation.

It is expected that the NDRC will steadily (10-15% y/y) increase the ceiling gas prices by an estimated 10-15% each year, reflecting the buoyancy of the Chinese gas market.