Coal represented 84.6 percent of Shanxi's energy mix in 2017 and local authorities plan to reduce the share to 80 percent in 2020 in a bid to fight pollution.

China recently announced plans to build two large coalbed methane production areas in coal-rich Shanxi - one in the Qinshui Basin and the other in the eastern Erdos Basin. Each basin has recoverable gas reserves of 1 trillion cu m, with a combined annual production capacity of 8.3 billion cu m.

By 2020, Shanxi plans to raise its annual coalbed gas output to 20 billion cu m and transport 6 billion cu m of gas from the two bases to other parts of the country through pipelines.

According to Na, coalbed methane development was previously held back by exorbitant pipeline tariffs, mining rights disputes overlapping with the coal mining industry, and lengthy project approval processes.

"With these barriers gradually being lifted or eased by ongoing market reform and further technological breakthroughs, producers are motivated to increase investment and output to meet the surging gas demand," she said.