CITIC Resources interested in coal-gas assets

CITIC Resources is considering a bid worth US$6-10 billion for coal-gas assets put up for sale by Australia’s Origin Energy, the South China Morning Post reported. The Australian company, which is trying to fend off a US$13.4 billion hostile takeover by British firm BG Energy, started supplying information to potential bidders earlier this month. Origin hopes that through the sale of its coal-bed methane assets to CITIC or another party, it will win shareholder support for the piecemeal break-up of the company. This would be more lucrative than selling the whole enterprise to BG. With oil prices hitting record levels, energy companies are open to alternative sources such as coal gas, despite the high cost of extraction. China used 1.4 billion cubic meters of coal-bed methane in 2006, 3% of its total natural gas consumption. The government wants to increase this to 10% by 2010.