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Sino Oil and Gas: Piped CBM Sales from Sanjiao to Start Soon (China)

November 14, 2012

Sino Oil and Gas Piped CBM Sales from Sanjiao Starts Soon

Sino Oil and Gas Holdings announced that piped sales of coalbed methane (CBM) from the Sanjiao block will soon commence.

The project is jointly developed by Orion Energy International, the Group’s wholly-owned subsidiary, and its PRC partner, China National Petroleum Corporation. The Group targets to achieve daily CBM sales of not less than 100,000 cubic meters by the end of this year.

Constrained by a tight supply of natural gas and the lack of piped infrastructure, the western part of Shanxi Province has unfilled demand for gas. The Shanxi Provincial Government has therefore planned three designated CBM pipeline networks and a small scale liquefied natural gas (LNG) plant in the surrounding area of Sanjiao block. The Group’s CBM block will be the major supplier of natural gas for these pipelines and LNG station.

These projects are built and funded by third-party investors. They include:

  • Sanjiao-Linxian CBM pipeline to supply gas for residential and commercial/industrial use in Linxian;
  • Sanjiao-Lishi (CBM pipeline network to supply gas to Lvliang for residential and commercial/industrial use;
  • designated CBM pipeline from the Group’s CBM block to support the gas consumption of Senze Coal & Aluminum Group a local coal and aluminium production corporation;
  • LNG station located within the Sanjiao block to deliver gas through tankers to the east of Shanxi Province.

The four projects are expected to be completed by the end of this year to enable the Group to commence piped and LNG sales of CBM, which will significantly increase Sanjiao’s scale of sales, currently active only through CNG delivery.

Sino Oil and Gas Holdings CEO Mr. Xu Zucheng said: “After six years of exploration, the Shanxi CBM project is beginning to step into commercial production. Trial CNG sales have commenced since August 2011, and upon completion of the three designated CBM pipelines and LNG station, the bottleneck that constrains large-scale external sales will be eliminated.

“We target to achieve daily CBM sales of not less than 100,000 cubic meters by the end of this year. Looking forward to 2013, we will drive further CBM production and sales with a view to generating significant revenues for the Group.”

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LNG World News Staff, November 14, 2012; Image: Sino Oil and Gas Holdings