In 2015, the advancement of coal-to-natural gas projects in China accelerated, with a total investment of 390 billion yuan

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Coal-based synthetic natural gas is one of the **“Modern Coal Chemical Industry Demonstration” initiatives outlined by the National Development and Reform Commission, and it also constitutes an important part of China’s natural gas supply. In May 2014, the **Work Plan for Strengthening Air Pollution Control in the Energy Sector** proposed that by 2017, China’s capacity for coal-to-gas production should reach 32 billion cubic meters. In June 2014, the **Energy Development Strategy Action Plan (2014–2020)** also called for the careful implementation of coal-to-gas demonstration projects, as well as the advancement of research and development in coal-to-gas technology and the promotion of its industrialization. Despite being criticized for environmental and economic reasons over the past two years, coal-to-gas projects have continued. However, the large-scale coal-to-gas demonstration plants that have been put into operation have provided valuable experience for subsequent commercial projects. Moreover, China’s huge market potential for natural gas, along with expectations of a rational recovery in international energy prices in the future, keeps investors optimistic about the prospects of coal-to-gas technology. Research by Yaha Consulting shows that, compared to 2012–2014, the advancement of coal-to-natural gas projects in China accelerated in 2015. In addition to the four coal-to-gas projects that have been approved by the **National Development and Reform Commission – Qinghua in Yili, Xinjiang; Hui Neng in Inner Mongolia; Datang in Keqi; and Datang in Fuxin – 15 more coal-to-gas projects made significant progress during the first half of 2015. Yahua Consulting believes that the 15 coal-to-gas projects mentioned above, which are making active progress in their preliminary work, reflect the latest characteristics of China’s coal-to-synthetic natural gas (SNG) industry: 1. The preliminary work for these projects is carried out to high standards and in a standardized manner, effectively preventing construction before approval is obtained. 2. Great emphasis is placed on key approval-supporting documents such as environmental impact assessments, energy efficiency evaluations, and water resource certifications. 3. For some projects, the preliminary work has been completed to a high degree; only 1–2 additional documents, such as an environmental impact assessment, are needed for approval. Given the latest trends in project approval in China, if all the required supporting documents for coal-to-gas projects are successfully obtained, approval will almost certainly be granted, leading to the actual start of construction. The total annual production capacity of SNG for these 15 coal-to-gas projects that are in the early stages of development is 62.2 billion cubic meters, with a total investment of nearly 390 billion yuan. Research by Yahuazheng Consulting shows that these projects will begin construction one after another during the 13th Five-Year Plan period, bringing huge market opportunities to related industries such as technology, equipment, engineering construction, and environmental protection services. By 2020, China’s coal-to-gas production capacity will reach 77.7 billion cubic meters per year, and coal-based SNG will, along with shale gas and coalbed methane, become an important part of China’s natural gas supply.