Green Dragon to Divest Wholesale Gas Business

China focused coal bed methane player Green Dragon Gas has decided to divest its wholesale gas business to focus on the higher margin upstream business.

The company has planned to sell its 29% effective interest in Beijing Huayou United Gas Development Co. Ltd, the downstream wholesale gas distribution business in Beijing.

The development is part of the comprehensive business review and a strategically focused growth plan, the company said in a statement.

“The Company is committed to be a focused upstream (E&P) business through the continued divestiture of the ancillary businesses developed and acquired by Green Dragon out of necessity to achieve the growth as a pioneer in the Chinese CBM market. At the conclusion of this plan, the Company will be a high growth E&P business within the exponentially growing unconventional gas market in China with reduced fixed costs,” the statement said.

 Green Dragon has also seen a production growth of 61% in the first quarter of 2013 with production of 7,516 Mcf per day (212,908 cubic meters per day) compared with 4,660 Mcf per day (132,022 cubic meters per day) in the same period last year.