Greka signs methane contracts with China

Jan 31, 2003 01:00 AM

Greka Energy Inc., a subsidiary of Greka Energy Corp., has signed four 30-year production-sharing contracts (PSCs) with China United Coalbed Methane Corp. (CUCBM) for the exploitation of coalbed methane resources in Shanxi and Anhui provinces, China. Greka previously had secured a PSC for the Fengcheng Block in Jiangxi Province.

Greka will serve as operator of the five blocks with a 60 % working interest in all PSCs except the Fengcheng Block in which it has a 49 % working interest. CUCBM will own the remaining working interests.
The combined total contract area is 1.7 mm acres, with average coalbed thickness of 16.5 ft and potential reserves of 34.5 tcf, Greka said. Three of the blocks are near the West-East natural gas pipeline that is expected to provide immediate access to CBM markets.

China has a population greater than 1 bn and estimated CBM reserves of 1,059-1,236 tcf within a depth of 6,560 ft. Although these reserves are among the top five largest in the world, China has not yet sold commercial CBM production, Greka said, because traditional development requires extensive vertical wells and high capital expenditures in surface facilities.
Greka Chairman and CEO Randeep S. Grewal said the company will use its horizontal drilling technology to deplete the reservoirs, investing less capital expenditure in fewer required surface facilities.

Source: Neftegaz.RU
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