Primeline Completes Settlement of Zhejiang Gas, COSL Disputes
China focused oil and gas company Primeline Energy has completed all the procedures required under recent settlement agreements relating to the disputes with Zhejiang Natural Gas Development Company and China Oilfield Service (COSL), Primeline said May 29.
In March, settlement agreements were signed between joint venture partners, Primeline and CNOOC China (CCL), with Zhejiang Gas. Primeline was in dispute with Zhejiang Gas since April 2015 regarding the price payable under the gas sales contract to Zhejiang Gas.
Primeline said Zhejiang Gas did not pay in full for gas delivered, did not off-take in accordance with the gas sales contract and failed to make payment under the take-or-pay arrangements. CCL is a joint seller and acts as agent for Primeline under the sales contract.
Primeline received the settlement payment with regard to the Zhejiang Gas dispute on May 24 and all the legal proceedings were withdrawn. Subsequently, Primeline Energy Operations International (PEOIL), a subsidiary of the company, signed a settlement agreement with COSL for the payment due under the turnkey drilling contract and termination of COSL’s legal proceedings in China International Economic and Trade Arbitration Commission (CIETAC) against PEOIL.
PEOIL made a full settlement payment to COSL in early April, and last week Primeline received confirmation from CIETAC that COSL’s arbitration proceedings against PEOIL had been formally terminated. With this, all the procedures under the March 1, 2017, settlement agreement have now been completed, Primeline said.
However, the settlement with Zhejiang Gas and COSL did not affect the ongoing arbitration by Primeline against CNOOC and CCL under the petroleum contract in relation to the LS36-1 development and production which was commenced in June 2016. In accordance with the CNOOC arbitration procedures, Primeline submitted the formal statement of claim (SOC), together with all supporting witness and expert statements and documents April 25, 2017, and will submit the Chinese translation version of the SOC and related documents June 5, 2017.
Shardul Sharma