Green Dragon Gas reports progress with third Chinese development

26th Sep 2016 12:32

(ShareCast News) - London listed Green Dragon Gas, a producer of coalbed methane gas in China, reported that its Baotian-Qingshan block in the Guizhou province has moved to development status.The block in southern China, where Green Dragon Gas acts as operator with a 60% interest with the remainder owned by PetroChina, is expected to gain an approval through a report on the block from the Ministry of Land Resources, which is precursor for the approval of the company's overall development plan, in 2017.In the exploration phase for the block, which is the company's third, the company drilled 33 wells, which covers seven of the prospective seams.Nine of the wells are currently connected to power and undergoing dewatering or producing gas, and of these, four wells have established commercial gas rates in accordance with the Ministry of Land's guidelines.Gas companies Sinopec and Chevron have found shale gas in the Guizhou province and if they can be found to be commercially viable they could indicate the potential for shale exploitation within the Baotian-Qingshan block and the company said exploration results so far had been "encouraging".The coalfield is close to both the China Myanmar Oil & Gas pipeline and the Guizhou Natural Gas pipeline both of which could be used to transport gas from the block to users.Chairman and founder Randeep Grewal, said: "The Baotian-Qingshan block has progressed from an exploration block into our development portfolio. The block is an exciting prospect as it contains multiple prospective coal seams and is located in southern China, which has historically been short on gas production."Realising the potential of the Baotian-Qingshan block is an exciting objective for the group in the medium term and one that I believe will achieve our dual aims of actively participating in the gas and clean energy revolution in China while providing strong returns to shareholders."Shares in Green Dragon Gas were down 4.35% to 220p at 1602 BST.