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.

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.

(Xinhua News Agency May 21, 2009)