Green Dragon to Advance Chinese CBM

London-listed coalbed methane explorer Green Dragon Gas announced April 18 that the Qinshui Basin Chengzhuang Cooperative CBM block (GCZ block) overall development plan has been approved by partner China National Petroleum Corporation.

To date, 114 wells have been drilled on the acreage; the development plan includes the drilling of an additional 147 production wells in 2017 and 2018. Production is estimated to increase from 3.01bn ft³ in 2017 to 3.23bn ft³ in 2018.

Randeep S. Grewal, chairman, Green Dragon Gas (Credit: Green Dragon Gas)

The development cost for GCZ is budgeted to be about $53.8mn over 2017 and 2018. CNPC will invest $28.51mn in accordance with its 53% participating interest and Green Dragon $25.28mn based on its 47% of participating interest in the block. Under the terms of the PSC, CNPC can carry the company which it has done till date in the blocks development, Green Dragon said.

The GCZ block is located in Shanxi province's Qinshui basin with an area of 67 km², approximately 20 km south of the Greka Shizhuang South Main block. As per the NSAI reserve report of December 31, 2016, GCZ block has original gas in place of 275bn ft³.

Shardul Sharma