April 20, 2026 - A high-profile Chinese coal-to-gas venture that lay dormant for over a decade is set to launch this year, part of a wave of investments that will allow Beijing to mitigate threats to fuel supply at a time of heightened geopolitical tensions.

State-owned power giant China Datang Corp. restarted construction in the northeastern city of Fuxin in the fall. The company aims to bring the plant online in October, according to a local newspaper report citing the project’s general manager, signaling the revival of an industry once sidelined for being too polluting and financially risky.

The government is looking to tap cheap domestic coal to limit its exposure to natural gas imports. That need has grown this decade as sanctions and protectionism have disrupted global energy flows. It’s become particularly acute in recent weeks, after the war with Iran upended shipments from major gas producers in the Middle East.

Datang didn’t respond to an emailed request for comment on the Fuxin project’s timeline and prospects.

The 25-billion-yuan ($3.7 billion) development broke ground in 2011, but was then shelved in 2014 due to a combination of logistical and technical challenges, environmental concerns and unfavorable market conditions.

Project Shelved

The industry has found new momentum thanks to China’s oversupply of coal and elevated gas prices. Other major investors in the technology include the country’s top two coal miners, China Energy Investment Corp. and China National Coal Group, and oil and gas majors Sinopec Group and China National Offshore Oil Corp.

The country has 13 new projects either under construction or being planned. Plants can take up to five years to build, but the pipeline has the potential to raise synthetic gas output nearly sevenfold to more than 52 billion cubic meters a year, or 12% of national supply, according to Chinese consultancy OilChem.

“China began planning those coal-based projects well before the Middle East war,” said OilChem analyst Wang Haohao. “Improved profitability is encouraging investors to accelerate construction.”

There’s still a big gap to fill. Chinese projects, including Fuxin, should be able to deliver 12 bcm by the end of the year, according to OilChem. Qatar, China’s biggest source of gas in the Middle East, supplied 28 bcm in 2025.

The technology also serves China’s political needs. Beijing’s latest five-year plan calls for more developments in remote, energy-rich regions like Xinjiang in the far west, which is home to most of the new coal-to-gas projects.

Xinjiang’s coal is ultra cheap, which means outsized profits once it’s converted into gas and piped to customers in the east. BloombergNEF estimates production costs in the region would translate to $5 to $9 per million British thermal units. Spot Asian prices of seaborne liquefied natural gas have surged as high as $25 mmbtu because of the war, although they’ve since retreated to the mid-teens.

BNEF said Xinjiang may bring 8 bcm a year online by 2028, double the nation’s current capacity.

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