Dart Energy and Fortune Oil have said that construction of the independently-owned compressed natural gas (CNG) facility at Liulin, China, has been completed and is now awaiting final approval before operations in the second half of 2012.
The facility, located in the Shanxi province, will compress natural gas collected from the Liulin coal bed methane (CBM) block for onward distribution, and allows early pilot gas production at Liulin.
The Ministry of Commerce (MOFCOM) has given the green light for the extension of the exploration period of the production sharing contract (PSC) for the Liulin CBM block for a further two years until 29 March 2014.
Dart said this allows time for pilot gas appraisal and commercialisation ahead of the full overall development plan approval.
Dart Energy International CEO John McGoldrick said another key project in the company's portfolio is moving steadily towards first revenue and cashflow.
"Our clear focus is on a small number of projects that all have the potential to deliver production, revenue and cash-flow over the next 12 months."
The company also revealed that a gas sales agreement is in place for upcoming pilot production.
Both Dart Energy and Fortune Oil hold 25% interests in the gas rights to the CBM at Liulin while China United Coal Bed Methane, a State-owned entity, owns the remaining 50%.
Operator FLG is the operator of the PSC, and through FLG, Dart Energy and Fortune Oil act as joint operators.
Image: The compressed natural gas wholesale station in Liulin will compress the natural gas collected from the Liulin CBM block for onward distribution.Photo: Mbeychok.