Enviro Energy International Holdings, plans to drill up to five wells of coal-bed methane/shale gas in Western China this year, and five more in 2010, a top company official said on Thursday.

Hong Kong-listed Enviro will pump some $2.25 million in exploratory activities in China, especially in the Junggar Basin in western Xinjiang province, Chief Executive Officer Kenny Chan told Reuters in an interview.

China is supportive of clean energy. It is progressing from a coal economy to a gas economy and it has enough gas underground, said Chan, on the sidelines of a coal-bed methane (CBM) conference in Singapore.

Commercial CBM production in the Junggar Basin could take place in 2011, he added.

Two wells were drilled in our PSC area last year. The basin is estimated to hold 69 trillion cubic feet of gas resources, Chan added.

Enviro could potentially supply the gas in the regional capital Urumqi in Xinjiang or feed the gas into the West-East pipeline, which runs from Lunnan in Xinjiang to Shanghai.

The Junggar Basin project is a joint venture between China United Coalbed Methane Corp (CUCBM) and Terrawest, in which Enviro holds 65.58 percent and Petromin the rest.

Terrawest owns 47 percent stake in the Junggar Basin while 53 percent by CUCBM.

Apart from the Xinjiang project, Enviro has two others.

Its flagship project is the 15 square kilometer (5.8 sq mile) Qian An oil field, in which Enviro has an equal share with PetroChina.

Located in Jilin province, the daily oil output from Qian An is pegged at 240 barrels, with production peaked at 390 barrels per day last year when oil prices hit a record high.

The other project, still on a pilot phase, is in Southern Qinshui Basin in Shanxi Province. Both Enviro and Petromin have a 20 percent stake each, with the remainder taken up by CUCBM.

Formed in 2007, Enviro is debt-free and has a market capitalization of $250 million.

China holds 36 trillion cubic meters (1,271 trillion cu ft) in coal-bed methane gas reserves, the world's third biggest after Russia and Canada.

It will boost power-generating capacity from plants burning coal-bed methane by 63 percent to 1.5 gigawatts by 2010.

It would also increase the number of residential users of the gas by 122 percent to 2 million by next year.

Energy China