Under the agreement, the strategic investor will be entitled to 60% of Molopo’s interest in the Liulin project by contributing $US2.5million (A$3.46 million) to the project.
The bulk of the funding is expected to be applied to production testing, aimed at identifying a stimulation technique that could be applied to the estimated 700-800 billion cubic feet (740-845 petajoule) gas resource.
“The investor has considerable expertise in oil and gas investments and operations in China,” said Molopo managing director Stephen Mitchell.
“The strategic investor’s experience in China’s gas industry, combined with Molopo’s upstream expertise in CBM, should help unlock the massive gas resource at Liulin.”
The transaction is conditional upon several matters including approvals from the Chinese authorities and Molopo’s partner, China United Coalbed Methane.
Molopo and China United Coalbed Methane each currently hold 50% of the project.
