Green Dragon Gas Gets Benefit of China CBM Subsidy Hike
Green Dragon Gas on Tuesday said the recent hike by the Chinese government in level of cash subsidy on CBM production will give a boost to continued development of company's extensive acreage.
Earlier this year, China announced a 50 percent increase in cash subsidy from $0.87/Mcf to $1.31/Mcf. The increase effective 1 January, 2016, was announced as part of the country's 13th Five-Year-Plan.
“The increase in the state subsidy will provide additional income for the Group and supports the continued development of the Group's extensive acreage held under its six Production Sharing Agreements with its partners CNOOC, PetroChina and CNPC,” the company said.
The Plan reiterated the importance of CBM in China's domestic energy market and underscores the government's focus on the development of a clean and low-carbon energy system that is both safe and efficient.
"This increase is yet another demonstration of the Chinese government's continued commitment to develop domestic clean energy from coal beds to facilitate its objective of increasing the gas component of the energy mix. Green Dragon's CBM provides an important domestic resource which, after twenty years of the Company's efforts, is well defined, de-risked with proven technology and made even more economically favourable with this increased government contribution," Randeep S. Grewal, chairman of Green Dragon Gas, commented.