Sino Extends China Gas Sales Agreement
Australia-listed but China-focused Sino Gas & Energy (SGE) has agreed terms for a one-year extension to March 31, 2019 of a Linxing gas sales agreement with Shanxi GuoHua Energy, Sino Gas & Energy Holdings said June 6.
Sino Gas & Energy is a joint venture between Sino Gas & Energy Holdings and China United Coalbed Methane (CUCBM) while Shanxi GuoHua Energy is a Sinopec subsidiary and one of the largest gas distribution companies in China’s Shanxi province.
The agreed average sales price, effective April 1, 2018, has increased 5% from the previous contract to yuan 1.61/m3 ($0.25/m3), taking into account seasonal adjustments, and is the same price agreed with the other current gas buyer of Linxing gas, Sino said.
“This agreement is consistent with SGE’s natural gas marketing strategy to maximise price, volume off-take and certainty by maintaining a diversified portfolio of gas buyers,” Sino Gas’ managing director Glenn Corrie said.
Sino is the operator of the Chinese Linxing and Sanjiaobei production sharing contracts (PSC) in the Ordos Basin, China’s largest gas producing basin. The company’s current interest in the Linxing PSC with CUCBM is 70% and 49% of the Sanjiaobei PSC held with PetroChina subsidiary PCCBM.