CNOOC accelerates Green Dragon’s CBM asset development

Green Dragon Gas (GDG), one of the largest independent companies involved in the production and sale of coal bed methane (CBM) gas in China, has a finalised a memorandum of understanding (MoU) on five production sharing contracts (PSCs) and two supplementary agreements with China United Coalbed Methane Corporation (CUCBM), a subsidiary of China National Offshore Oil Corporation (CNOOC), for the Shizhuang South (GSS) and Shizhuang North (GSN) blocks.

According to Sanjeev Bahl, Market Analyst at Edison Investment Research Management, the MoU is a ‘material milestone for the company’ and joint co-operation with CNOOC on the exploitation of the GSS and GSN blocks ‘should lead to enhanced gas sales and greater certainty of cash flows for equity and debt holders’.

According to Randeep S Grewal, Founder and Chairman of Green Dragon Gas: ‘[The MoU] concludes eight years of discussions and commences a committed close cooperation between the parties to unlock the lucrative monetisation of the GSS and GSN blocks. The joint cooperation will now fully focus on gas sales and achieving returns from the combined investment made by CUCBM and GDG. It will be the first time in eight years that the parties can focus on gas sales in the field rather than the administration of the PSCs. We are pleased to have a similar close cooperation with CUCBM as we do with CNPC on the GCZ block.’