The three contractual tracts are located in Inner Mongolia's Junggar, Shaanxi's Shengfu and Shanxi's Baohe, totaling a 6,897sqkm area and 1 trillion cbm prospected reserves. Huang shaohe, chairman of Zhonglian Coal-bed Methane, said the cooperative tracts feature good geological conditions for coal-bed methane, moderate coal bed depth, simple structure, high coal-bed gas content and easy production. In the contract, Texaco Petroleum will independently take the exploration risk in the five years' exploration period, both sides will jointly invest during the development and production period, and sales income of coal-bed methane will be shared in proportion.

Since Zhonglian was founded in 1996, it has signed 10 coal-bed methane cooperative production contracts with foreign investors, and the total area of cooperative tracts has expanded to nearly 20,000 sqkm.

The US Texaco Petroleum has injected the biggest investment in the Chinese coal-bed methane industry. China has 30-35 trillion cbm coal-bed methane resources at a depth of 2,000 meters, ranking third in the world. China is the second country next to the US in large-scale onshore coal-bed methane prospecting.

(Eastday 12/13/2000)