Chinese, US companies to jointly explore CBM resources in Hubei

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Last updated at: (Beijing Time) Sunday, October 12, 2003

Chinese, US companies to jointly explore CBM resources in Hubei

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China United Coalbed Methane Corp.Ltd. (CUCBM) and Gladstone Power Energy Corporation USA Holdings (Gladstone) have signed a production sharing agreement for the exploration of coalbed methane (CBM) in central China's Hubei Province.

The contracted block in Huangshi has a total area of 304 square kilometers with estimated coal resources of around 220 million tons and CBM resources of 5 billion cubic meters.

Under the 30-year contract signed here Friday, Gladstone will bear all the risks and expenses of exploration for CBM during the exploration period. Entering the development period, both parties will invest and share in CBM production in proportion according tothe contract.

Energy is in great demand in Hubei and energy shortages have been one of the major obstacles for the province's economy.

The two sides are confident of the market potential of the exploration and development of CBM in the Huangshi block. The Xizhaishan Power Plant, under construction in the city, has an installed capacity of 6.4 megawatts. The plant will be upgraded toconsume natural gas (including CBM) in its second construction phase. The Zhongxian-Wuhan gas pipeline, which is expected to go into operation in 2004, will pass through Huangshi, providing an access for the CBM from Huangshi.

CUCBM has signed 20 production sharing contracts with foreign companies since its establishment in 1996. The total area of its contracts is 32,000 square kilometers, with estimated CBM resources of 3 trillion cubic meters. CUCBM is the only company specializing in CBM exploration, development, production, utilization, transportation and marketing in China.

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