Australia's Sino Gas & Energy Holdings has signed a joint gas marketing agreement with state-owned PetroChina for their Sanjiaobei coalbed methane pilot project in Shanxi province, the company said Thursday.
The agreement was signed by Sino Gas and PetroChina Coal Bed Methane, its partner in the Sanjiaobei production sharing contract in China's Ordos Basin. Under the deal, the joint marketing continues until the start of commercial production.
"We have been working very closely with PCCBM to plan the pilot and with the gas marketing agreement now in place we have the foundation under which to commence the pilot program," said Sino Gas Managing Director Stephen Lyons. "The pilot is a critical step towards development in that it provides sustained well performance data to prepare the Chinese reserves report which when completed will be the key building block towards the preparation of the overall development program."
Sino Gas plans to commission the first of what would be a series of pilot wells at the SJB03 gas discovery during March 2011. Other wells will be added to the pilot as they are completed.
Sino Gas holds a portfolio of unconventional gas assets in China. The company's Shanxi PSCs cover an area of more than 3,700 sq km in the Ordos Basin, which is China's second largest onshore oil and gas producing region.
The area has mature field developments with established pipeline infrastructure to major markets and has enjoyed rapid economic development, Sino Gas said.
