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China

By OGJ editors
HOUSTON, July 21
– Sino Oil & Gas Holdings Ltd., formerly Genesis Energy Holdings Ltd., plans to acquire Orion Energy International, which has a 70% interest in the Sanjiao coalbed methane block in China’s Shanxi and Shaanxi provinces.

Upon closing, subject to shareholder approval, an undisclosed vendor will own 19.16% of Orion.

Orion entered into a production sharing contract in 2006 to exploit the 461.74 sq km block in the Ordos basin and sell gas at a 70-30 profit sharing ratio with PetroChina.

Beginning in 1999, a large number of exploration pilot wells were drilled in the Sanjiao block to evaluate the CBM potential. Since the production sharing contract became effective in June 2006, Orion drilled seven more multilateral wells to gather more reservoir data and started trial gas production in May 2009.

Gas pipeline construction close to the Sanjiao Block is under way and expected to be completed in early 2011. The pipeline will have a capacity of 96.7 MMcfd. Orion is also considering transporting and selling its CBM as compressed natural gas or liquefied natural gas.


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