Dart Energy International Pte Ltd has entered into a Letter of Intent (LOI) with Henan CBM (HCBM) and Hong Kong Prosperous Clean Energy Company (HPEC). The LOI relates to the establishment of potential new foreign cooperation Production Sharing Contracts (PSCs) – up to four for coal bed methane at various blocks in Henan Province, China, and one for shale gas in Sichuan Province, China.
At the same time, Dart and HPEC have entered into a Memorandum of Understanding (MOU) setting out the key commercial terms for a collaboration between Dart and HPEC in relation to these potential PSCs and associated downstream activities.
HCBM is a Chinese state-owned enterprise and one of only four companies approved to enter into foreign co-operations PSCs for coal bed methane in China (the others being PetroChina, China United Coal Bed Methane, and Sinopec). HPEC is a substantial privately-owned company which primarily focuses on clean energy in Henan Province, including operation of LPG & CNG gas stations and other natural gas facilities.
Under the terms of the LOI, Dart, HCBM and HPEC will negotiate exclusively, and seek relevant Government approvals for, foreign cooperation PSCs in relation to some unconventional gas assets currently held by HCBM, being:
The key commercial terms as set out in the LOI and MOU are:
Dart International Chief Executive Officer, Mr John McGoldrick, said, "We are extremely pleased by this important development in our Chinese business, which gives us the opportunity to significantly expand our China activities, through ground-floor entry into potentially high prospect licenses – for CBM and for shale – we believe that a number of these could be multi-Tcf propositions. In relation to shale gas, this would make Dart one of the first foreign participants in the rapidly emerging Chinese shale gas industry, alongside some of the majors.
"We believe that our global activity base and substantial specialist expertise, as well as the excellent work done and reputation built by our China team over the last several years has resulted in Dart International being the industry partner of choice for Henan CBM and Hong Kong Prosperous Clean Energy Company. We are honored that these esteemed companies have selected Dart International for foreign cooperation, and we look forward to working closely with our new partners on unlocking the resource potential in these assets”.
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