Significant investment is on the cards for an Australian firm’s Chinese coalbed methane (CBM) project, which will extract gas from coal seams in the Hielongjiang province.
Triple Energy recently acquired an 80% interest in the Hielongjiang project, which will de-gas coals in LongMay Coal Mining Group’s coal mining operations in the Daqing Coal Basin.
According to Triple Energy, the board considers the project to have “potential to establish a meaningful gas production business in the near term, providing successful results from the upcoming drilling campaign are achieved.”
Triple Energy will now receive a significant boost as it announces an investment agreement has been signed with Blue Sky Power.
Blue Sky Power, which has natural gas operations throughout China, will incest US$ 6 million in Triple Energy and its CBM project as per a memorandum of understanding (MOU).
Triple Energy has already received payment of a non-refundable exclusivity fee of US$ 200 000.
“The MoU contemplates that should the transaction proceed, $2 million will be advanced to a TNP subsidiary by way of a loan from BSP followed by a placement of shares in TNP at A$0.005 per share (subject to shareholder approval where necessary) such that BSP’s holding in TNP reaches 19.99%. This shareholding will be subject to a twelve month voluntary escrow period,” Triple Energy said.
Triple Energy’s chairman, Paul Underwood said, “TNP welcomes this proposal and MoU by Blue Sky Power. We have been working with Blue Sky Power for some time and should this transaction proceed, it should see the next two wells drilled in the very near term.”
Triple Energy’s Daqing CBM project has an expected life of 45 years. The company also believes gas produced from the coal seams will find an immediate market and will find prospects to grow the market in the Chinese province are high. This is because the Heilongjiang region already shows considerable growing demand for electricity, according to the company.
It is understood that there is a 118 km gas reticulation network already in place supplying existing domestic customers with gas. The network lies only 3 km or so away from the project site.
Written by Sam Dodson
Read the article online at: https://www.worldcoal.com/cbm/14082014/investment-in-chinese-cbm-project-cbm94/