Green Dragon Gas Ltd., one of the largest independent companies involved in the production and sale of Coalbed Methane (CBM) gas in China, reported Tuesday a 50 percent increase, from $0.87 per thousand cubic feet (Mcf) to $1.31/Mcf, in the level of cash subsidy to be paid per Mcf paid for CBM produced. The increase, effective Jan. 1, 2016, was recently announced by the Central Government of the People's Republic of China (PRC) as part of the Country's 13th Five-Year-Plan (the Plan).
The Plan reiterates the importance of CBM in China's domestic energy market and underscores the Central Government's focus on the development of a clean and low-carbon energy system that is both safe and efficient. China continues its commitment to increasing gas consumption as part of a cleaner energy mix.
The increase in the state subsidy will provide additional income for the Group and supports the continued development of the Group's extensive acreage held under its six Production Sharing Agreements with its partners CNOOC, PetroChina and CNPC.
Randeep S. Grewal, founder and chairman of Green Dragon Gas, commented:
"This increase is yet another demonstration of the Chinese government's continued commitment to develop domestic clean energy from Coal Beds to facilitate its objective of increasing the gas component of the energy mix. Green Dragon's CBM provides an important domestic resource which, after twenty years of the Company's efforts, is well defined, de-risked with proven technology and made even more economically favorable with this increased government contribution."
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