China Focused Sino Signs New Gas Sales Agreement
China focused Australian company Sino Gas & Energy Holdings has signed a new gas sales agreement (GSA) with Shanxi GuoHua Energy, the company said July 17.
“Driven by increasing production reliability and a robust natural gas demand growth outlook, Sino Gas' joint venture company, Sino Gas & Energy Limited, in conjunction with its Linxing PSC partner, CUCBM, have signed a new GSA with existing gas buyer, Shanxi GuoHua Energy Limited Company,” the company said. The gas will be supplied from Linxing Central Gathering System.
GuoHua is a subsidiary of Sinopec and is one of the largest gas distribution companies in Shanxi province. The revised GSA covers the period March 2017 to March 2018 with a fixed price of about $6.40/'000 ft3 equivalent. GuoHua has agreed a minimum daily contract quantity of 14mn ft3/d.
The one-year fixed price contract price is a premium to the average of the previous summer 2016 and winter 2016/2017 agreed gas prices and provides greater revenue certainty during the summer market demand period, Sino said.
Sino also stated that it is in discussions with GuoHua for additional gas sales agreements from the productions sharing contracts (PSC) from both the Sanjiaobei and Linxing fields.
Sino holds 64.75% interest in the project. Linxing and Sanjiaobei PSCs are located in the Ordos Basin and cover an area of around 3,000km². The Ordos Basin is the second largest sedimentary basin in China and the country’s largest gas-producing region.
Shardul Sharma