AAG Gets Preliminary Approval to Develop Mabi CBM Project in Shanxi

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AAG Energy Limited (AAG), an independent Coalbed Methane (CBM) company in China, announced Tuesday that the Overall Development Plan (ODP) for its Mabi CBM Project in Shanxi Province, obtained preliminary approval from the National Energy Administration (NEA) of China. The commercial capacity of the first phase is expected to reach about 35 billion cubic feet (Bcf) per year, with future commercial production expected to surpass 100 Bcf per year.

The Mabi CBM Project is a Sino-foreign cooperative commercial CBM project jointly developed by China National Petroleum Corporation (CNPC) and AAG’s wholly-owned subsidiary Asian American Gas, Inc. (AAGI), with AAGI as the operator. The preliminary ODP approval allows AAGI to start commercial development preparation and begin the process of obtaining government approvals necessary for the full-scale commercial development. The Mabi CBM Block has audited net 3P reserves of approximately 2 trillion cubic feet (Tcf) and is only one of two CBM blocks that AAG has been exploring and developing in the Qinshui Basin in the Shanxi Province, China’s most commercially-advanced CBM basin. Panzhuang CBM block, another block developed by AAG, achieved formal ODP approval in 2011 and is the first
and only Sino-foreign CBM Block in China to enter into commercial development. Panzhuang gross CBM production this year is expected to exceed 5 Bcf.

“The Mabi preliminary approval marks another important milestone for our unconventional gas development in China and further demonstrates our continued strong working relationship with our Chinese partners. The recognition of the commercial achievements in Mabi further demonstrates that AAG has the ability to successfully repeat its commercial development process from Panzhuang,” said Steve Zou, founder, chairman, and CEO of AAG.

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