Sino Gas & Energy Holdings (ASX: SEH) has commenced first compressed natural gas (CNG) sales on its Linxing production sharing contract (PSC) in the Ordos Basin, China.
In October, Linxing partner China United Coalbed Methane signed a CNG gas sales agreement to supply gas to a division of Shanxi International Energy Group, also the purchaser of pipeline gas under the gas sales agreement signed in June.
Under the CNG gas sales agreement, first gas was successfully transported by road to Shanxi's distribution facility on December 21.
Commencement of sales marks a significant milestone for Sino, accelerating monetisation of its Ordos Basin gas assets, and the long-term testing of selected wells.
Sino is focused on developing Chinese unconventional gas assets, with a 49% interest in Sino Gas & Energy, through a strategic partnership with MIE Holdings Corporation (SEHK: 1555).
The PSC's cover 3,000 square kilometres in the Ordos Basin, the second largest onshore oil and gas producing basin in China.
The region has mature field developments with an established pipeline infrastructure to major markets.
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