The China United Coalbed Methane Corp. Ltd. signed a production sharing contract with the US-based Asian American Coal, Inc. for cooperative exploitation of coalbed methane.

The contracted area, named "Mabi Block", is 1,371.29 square kilometers, with a total of 240 billion cubic meters of coalbed methane reserves. It is located in the southern Qinshui basin of north China's Shanxi province.

Under the contract, the Asian American Coal will bear all the risks in exploration during the five-year period. During the development period, both parties will invest and share in the coalbed methane production in proportion.

The cooperative parties are optimistic about the Mabi block. The national gas pipeline from west China to east China under construction will run across the southern Qinshui Basin, providinga good condition for the coalbed methane marketing of the project.

Sources with the Chinese company say that so far there are morethan 80 exploration wells in the southern Qinshui basin, which hasa combined proven reserves of 75.4 billion cubic meters.

Up to now, it has signed 21 contracts with foreign companies, bringing the total contracted area up to 33,300 square kilometers.The investment from foreign partners has surpassed 90 million US dollars.

China has a total of 30-35 trillion cubic meters of coalbed methane resources, ranking the world's third largest.

Source:Xinhua