CNOOC Commences Trial Production at LS36-1 Gas Field Offshore China

Primeline Energy Holdings Inc. (Primeline or the Company) reported Monday that trial production of gas from the LS36-1 gas field offshore Zhejiang Province, China has now commenced.

As previously announced, with the completion of the last section of the gas sales pipeline and connection to the provincial gas grid, the LS36-1 gas field development (Development) was completed July 1. Since then CNOOC Limited (CNOOC), as operator, and the downstream buyer, Zhejiang Provincial Gas Development Co. (Zhejiang Gas), commenced joint commissioning of the upstream and downstream facilities and trial gas production from the LS36-1 gas field commenced July 16.

The LS36-1 gas field is located in 26 feet (84 meters) of water in the East China Sea about 93 miles (150 kilometers) from the major city Wenzhou. The field was discovered by Primeline and has been developed by CNOOC, as operator, the Company and Primeline Petroleum Corp. The Development comprises a production platform with four production wells, a subsea pipeline and an onshore processing terminal. The gas is being sold to Zhejiang Gas, the owner and operator of the Zhejiang Provincial Gas Grid. Formal commencement of production will be announced after the completion of joint commissioning and the smooth operation of the equipment in this trial period of production.

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