Sino Moves on China CBM Project

Australia-listed but China-focused unconventional hydrocarbon explorer Sino Gas and Energy (SGE) has submitted the Sanjiaobei overall development plan (ODP) to its production-sharing contract (PSC) partner PetroChina CBM (PCCBM) for approval, it said January 2.

The ODP was compiled in collaboration with PCCBM and accounts for about 60% of the current discovered area of Sanjiaobei, Sino said, adding that future ODP submissions to support the development of the remaining discovered and prospective areas will be appended to this initial ODP and are more administrative in nature. SGE has 49% in the Sanjiaobei PSC.

“We are pleased that the first Sanjiaobei ODP has been submitted to our partner PCCBM, closely following the Linxing ODP submission. We expect to obtain both ODP approvals in the first half of 2018 as we continue to observe initiatives to shorten regulatory approval timelines to bring on new sources of domestic gas supply to meet ongoing exceptionally high natural gas demand growth,” Sino Gas' managing director Glenn Corrie said. The target submission date had been the end of 2017.

In December, SGE said it had extended the gas sales agreement it had for a year to December 2018, and put up the price by an average 17% in winter, meaning it would be about $7.70/mn Btu in January to March 2018; and by an average 7% to in the summer, meaning it would be about $7.00/mn Btu from April to October 2018. Prices for the remaining contract period will be finalised during 2018.

Sino Gas also said then that it expects to exit 2017 with production close to nameplate capacity of 25mn ft³/d, with total daily production for the quarter averaging over 20mn ft³/d, and so it expected to meet production guidance of 16-18mn ft³/d . Well performance continues to exceed expectations, it said. Sanjiaobei accounted then for about 6mn ft³/d, and expected to reach nameplate of 8mn ft³/d when more wells were tied in.