Zhejiang Natural Gas Development Co., Ltd. owns and operates a provincial gas pipeline grid in the northern part of Zhejiang Province and engages in distribution of natural gas. The company is based in Hangzhou, China. Zhejiang Natural Gas Development Co., Ltd. operates as a subsidiary of China National Offshore Oil Corp.
Qingfang Mansion, No.8
Primeline Energy Holdings Completes Settlement of Zhejiang Natural Gas Development Company and China Oilfield Service Ltd Disputes
May 29 17
Primeline Energy Holdings has announced that it has now completed all the procedures under the recently agreed settlement agreements relating to the disputes with Zhejiang Natural Gas Development Company and China Oilfield Service Ltd. ('COSL'). As previously announced on March 1, 2017, settlement agreements were signed between Primeline and CNOOC China Ltd. ('CCL') and CCL with Zhejiang Gas relating to the dispute Primeline had with Zhejiang Gas with regard to the Gas Sale Contract and with COSL on the payment of the turnkey drilling contract. On March 24, 2017, Primeline received the settlement payment with regard to Zhejiang Gas dispute and all the legal proceedings with Zhejiang Gas were withdrawn. Subsequently, Primeline Energy Operations International Ltd. (PEOIL), a subsidiary of the Company, signed a settlement agreement with COSL with regard to 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 on May 26, 2017 Primeline received confirmation from CIETAC that COSL's arbitration proceedings against PEOIL in CIETAC had been formally terminated. With this, all the procedures under the March 1, 2017 settlement agreement have now been completed. As previously announced, 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 ('CNOOC Arbitration') 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 statements and expert statements and document on April 25, 2017 and will submit the Chinese translation version of the SOCand related documents on June 5,2017. In the meantime, the field production rate has been maintained at the normal design level of circa 25mmcfpd and the payment process has been normalised and maintained.
Primeline Energy Holdings Inc. Announces Settlement of the Dispute with Zhejiang Natural Gas Development Company Ltd. in Relation to the Gas Sales Contract for LS36-1
Mar 2 17
Primeline Energy Holdings Inc. announced settlement of the dispute with Zhejiang Natural Gas Development Company Ltd. in relation to the Gas Sales Contract for LS36-1. As previously announced, the company has been in dispute with Zhejiang Gas since April 2015 regarding the price payable under the GSC. Zhejiang Gas did not pay in full for gas delivered, did not off-take in accordance with the GSC and failed to make payment under the take-or-pay arrangements, all of which significantly impacted Primeline's cash flow. Pursuant to the settlement, Primeline will receive approximately RMB 256 million (CAD 49 million) net of VAT for its share of all outstanding unpaid or partly paid amounts due for natural gas delivered to the end of 2016 and for the 2015 and 2016 take-or-pay payments; Primeline will withdraw the CIETAC arbitration against Zhejiang Gas; once the settlement payment is received, Primeline will settle its own overdue payment owed to China Oilfield Services Limited (COSL) in the order of RMB 116 million (CAD 22 million) in relation to the 2015 drilling contract and COSL will withdraw its arbitration proceedings against Primeline. Further details will be announced when these settlement transactions are completed. This settlement represents the culmination of considerable effort on all sides and fully resolves the current dispute with Zhejiang Gas and, in addition to the significant one-off cash flow to the company, provides ongoing financial security to meet finance obligations and to make plans necessary for further investment in the assets. However, the settlement does not affect or halt the previously announced ongoing arbitration against CNOOC and CCL under the Petroleum Contract in relation to the LS36-1 development and production which was commenced in June 2016 and which is continuing.