China increases cash subsidy 50% for CBM produced locally

The Central Government of the People's Republic of China (PRC), as part of the country's 13th Five-Year Plan, has implemented a 50% increase, from $0.87 per thousand cubic feet (Mcf) to $1.31/Mcf, in the level of cash subsidy to be paid per Mcf paid for coalbed methane (CBM) produced, according to Green Dragon Gas Ltd., one of the largest independent companies involved in the production and sale of CBM gas in China.

The increase in the state subsidy, effective Jan. 1, will provide additional income for the Group, and supports the continued development of the Group's acreage held under its six production sharing agreements with its partners CNOOC, PetroChina, and CNPC.

Randeep S. Grewal, founder and chairman of Green Dragon Gas, commented, “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."

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