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1. The North of Shaanxi province at Carboniferous Permian Period Coal Mine,
XIAN SHANGGAOZHAI (佳縣上高寨區)exploration area and XIZHEN( 佳縣螅鎮區)
exploration area correlation datum.


First, exploration area coal resources forecast analysis:

1. The North of Shaanxi province at Carboniferous Permian Period ( 250-350 million years ago) Coal Mine, XIAN SHANGGAOZHAI
(佳縣上高寨區)exploration area and XIZHEN( 佳縣螅鎮區) exploration area are the extension of the Shanxi East River Carboniferous Permian Period Coal Mine to west direction.

Two exploration areas all are located at east edge of the Erdos Basin on China. The geologic structure is simple, the coal formation stratum and the coal bed resources are stable. The entire area of coal resources is distributed simultaneously. The coal mine have co-existed with coal bed gas or methane resources and the depth portion has prospected with extremely large amount of rock salt resources.

2. According to the exploration area geological investigation, the
remote sensing geology interpretation work and the regional geology material generalized analysis, in the preliminary forecast of XIAN SHANGGAOZHAI (佳縣上高寨區) exploration are area 279.63 square kilometer, the prospective coal resources is 295.2 million tons; XIZHEN( 佳縣螅鎮區) exploration area are 406.86 square kilometer, the prospective coal resources is 376.8 million tons. The quality of coal composed of mid ash, low sulfur to mid sulfur, mid to high heating value coking coal primarily, partial as fat coal, lean coal. Especially with
high quality coking coal, the coal for power generation and the coal for chemical industry

Second, the exploration area coal bed methane resources forecast analysis:

1 Basic with petroleum system pertinent datum: The Carboniferous Permian Period Erdos genetic marking of coal-bearing series, the quantity
is 450.60 10^12m3。In which, the gas from coal bed quantity is 350.9410^12m3; the gas from dull mud rock quantity is 99.5610^12m3。
2 Basic with petroleum system pertinent data: East Erdos Basin natural gas original seam (hydrocarbon) intensity: The gas of coal bed (hydrocarbon), the intensity is 22.5010^8m3/km2~281^08m3/km2。
3、The East edge of the Erdos Basin Carboniferous Permian Period lithotype of coal, the coal bed thickness is big, the coal quality is high, the coal seam and the roof and floor of coal seam and the dull mud rock air content are high, achieved at 2.46-23.25m3/t. The coal bed burying depth is moderated ( 500~1,500m ). The primitive permeability is high (Achieved generally 1 Darcy, 1 mD = 1mD=0.98710-3μm2(平方微米). The coal bed thickness (Single-layer thickness 3~8m, Accumulation thickness 8-13m )
The air content is high (12~23 Cubic meter/Ton). The primarily are fat coal, and coking coal and little amount of lean and meager coal, the lithotype of coal has suits the coal bed gas development with the superior geological condition.

According to pertinent data analysis forecast, wubu county has controlled the oil-gas field distribution at east to west structure belt, the Carboniferous Permian Period of hydrocarbon center to be located at
Yulin, Yi Chuan, the wubao county areas (榆林、宜川、吴堡) , the region area is approximately 50,000 km2. The hydrocarbon intensity is bigger than 28108m3/km2. The North of Shaanxi province at Carboniferous Permian Period Coal Mine, XIAN SHANGGAOZHAI (佳縣上高寨區)exploration area and XIZHEN( 佳縣螅鎮區) exploration area are located in this region, there is a good potential for prospecting coal bed gas and is the most advantageous sub-area for coal bed gas。

Third, the east side of exploration area has explored coal bed gas
resources situation:


1. East side the exploration area, Heng Gou coal field (橫溝井田) and Liu Hao Gou coal field (柳壕沟井田) were already finished with prospecting coal mine (the former is 78.5 square kilometer, the latter is 14.5 square kilometer, the total coal field- coal bed gas field area is
93 square kilometer ), this is a rare high quality coking coal mining area in China, and has already verified the coal workable reserves at
1.575 billion tons.

The wu Bao county coal bed gas field prospecting work started in the Sept of 2007 year. The coal bed gas field assumes the linearity with north and south direction along Yellow River, South gets up the wu bao county, north to Ding Jia wan township (丁家灣鄉 ); East takes Yellow River as boundary, west to Kou Jia Yuan and Mu Jia Yuan(寇家原—慕家原一線). The length of North and south is approximately 26 kilometer. The wideness from East to West is 2 to 5.5 kilometer. The total area achieved 93 square kilometer. The exploration indicated that, the wubao county mining area coal bed gas is about the depth of 500 meter to 1,000 meter .Each ton coking coal produces the coal bed gas is approximately in 10 to 12 cubic meter. The total resources of coal bed gas are above up 16 billion cubic meters.

2. The country is constructing the pipelines for the natural gas transportation from the west to the east, passes through XIN JIANG TA BEI (新疆塔北煤田), HUAI NAN coal field, (准南煤田), Erods Basin,
( 鄂爾多斯盆地), QIN SHUI Basin, ( 沁水盆地 ), YU XI coal field ( 豫西煤田 ), and the LIANG HUAI coal fields ( 兩淮礦區 ) in total of six main coal bed gas concentrates area. At the Shanxi BA JIAO ( 山西八角 ), Henan Zhengzhou( 河南鄭州 ), and Anhui with LIANG HUAI ( 安徽兩淮 ) leave a leeway to connect the pipelines for the natural gas transportation from the west to the east. The Shaanxi-Beijing pipeline passed through from north part of Shanxi – River East Coal field ( 山西河東煤田 ), QIN SHUI Basin ( 沁水盆地 ) North part, LIU LIN ( 柳林 ) leave a leeway to connect with The Shaanxi-Beijing pipeline. The natural gas West to East Pipeline and Shaanxi –Beijing Pipeline Would enrich the coal bed gas exploration in this area and set a good foundation to be connected with above two pipelines network for transportation coal bed gas.

3. According to "The national coal bed gas development plan", in“ Eleventh Five Year Plan 2007-2012” period, planning to construct East side of Erdos Basin to industrialize the coal bed gas production base. The wu bao county coal bed gas field will get the positive development from Erdos Basin. The coal bed gas is economic efficiency to be used.
According to the General Manager Sun Mao yuan of the Zhonglian coal bed gas limited liability company, said that each cubic meter of coal bed gas agreement’s price was RMB 1.1 by reckoning, the project internal returns ratio is 12.1%, and the total cost will be returned at 7.9 years.
Each cubic meter gas may make a profit of RMB 0.3-0.4. If the government implementing “ five exempts three to half”, ( namely 20 years exempt from the payment of increment duty tax, the income tax 5 years exemption, 3 year halving policies ), the project cost may reduce
RMB 0.3 /cubic meter, the profit margin can enhance to 50%, the cost recovering period will be reduced to 3-4 year.

2. The North of Shaanxi province at Carboniferous Permian Period Coal Mine,
XIAN SHANGGAOZHAI (佳縣上高寨區)exploration area and XIZHEN( 佳縣螅鎮區)
exploration area supplementary information


Basic situation

1. By The Ministry of Land & Resources P.R.C authorization, China Energy technology Holdings Ltd ( CET) in Shanxi Province sole ownership registration was setup. In Nov of 2007 year, CET officially
received " The North of Shaanxi province Coal Mine, XIAN SHANGGAOZHAI exploration area and XIZHEN exploration area reconnaissance of coal field prospecting permit " The exploration area is 686.49 square kilometer, among, SHANGGAOZHAI exploration area is 279.63 square kilometer, XIZHEN exploration area is 406.86 Square kilometer.

2. The North of Shaanxi province Coal Mine, XIAN SHANGGAOZHAI (佳縣上高寨區) exploration area and XIZHEN( 佳縣螅鎮區) exploration area at Carboniferous Permian Period ( 250-350 million years ago) The geologic structure is simple, the genetic marking of coal-bearing series is leaning at west, and the bedding angle 1~3. The coal formation stratum and the coal bed resources are stable. The entire area of coal resources is distributed simultaneously. The quality of coal composed of mid ash, low sulfur to mid sulfur, mid to high heating value coking coal primarily, partial as fat coal, lean coal. Especially with high quality coking coal, the coal mine have co-existed with coal bed gas or methane resources and the depth portion has prospected with extremely large amount of rock salt resources.

3. The coal bearing formation of Permian Period Shanxi Group and
Carboniferous Tai Yuan Group. Mainly are three workable coal seams reserves. Amongst, the thickness of 11st series coal bed is 3.5~5.0 meter; the thickness of 5th series coal bed is 0.8~1.3 meter; the thickness of 3rd series coal bed is 1.3~3.5 meter. The region coal resources is abundantly at 9.26 million tons/km2。(according to our East side, Heng Gou coal field (橫溝井田) exploration datum analysis, the coal resources is abundantly 16.935 million tons/㎞)
According to the exploration area geological investigation, the
remote sensing geology interpretation work and the regional geology material generalized analysis, in the preliminary forecast of XIAN SHANGGAOZHAI (佳縣上高寨區)exploration are area 279.63 square kilometer, the prospective coal resources is 295.2 million tons; XIZHEN( 佳縣螅鎮區) exploration area are 406.86 square kilometer, the prospective coal resources is 376.8 million tons.


4. Heng Gou coal field log (橫溝井田) is located at 10 km from north of the wubao county; and neighboring with XIZHEN exploration area at west side. The North and East of XIZHEN sides take Yellow River as boundary. The coal field assumes the long linearity with north and south direction and the length is 19 km, The wideness of East and West is about 2.8 to 5.6 km. The area is 78.5 km2. This special project started field operation from 2004-2006 year. The exploration report had been finished at Feb of 2007 year.

The China Mineral Resources Assessment Centre, under The Ministry of Land & Resources P.R.C for resources assessment as well as The Ministry of Land & Resources Planning, Shaanxi province and The China Mineral Resources Assessment Centre, Shaanxi province had jointly assessed the report and set up a file for this project.

The stratum for the monocline of Heng Gou coal field (橫溝井田) inclines to west, average inclination angle 5; There are 6 level workable coal seams, mainly are coal bed 3rd Level (s1-Average thickness 3.38m, t1; Average thickness 3.12m t1; Average thickness 5.14m). Each workable coal seam to be the low moisture content (0.68-0.81%); High volatile (22.47-29.17%); High calorific value (26.50-28.52MJ/kg); The low ash ( lower than22%); Low sulfur-mid sulfur; low phosphorus, Wash-ability medium, the nature is extremely crisp; Easily to be rubbed.

Already verified the coal resources reserves, (primarily occupied by the coking coal 80.2%), lean coal (occupied 14.5%) The fat coal
(occupied 5.3%). Others may be used for power generation, and the non-coking coal are the high quality refinery coke, the foundry coke, chemical industry coal and chemical industry raw materials for industry as coal to gasification and etc.

Heng Gou coal field (橫溝井田) have already finished with coal field prospecting, the workable coal reserves are 1,381 million tons (coking
coal 1,107 million tons, fat coal 73 million tons, lean coal 201 million tons). Others are the prospective resources 105 million tons; controllable resources 357 million tons; inference resources 919 million tons.
According to the above extrapolated that, XIAN SHANGGAOZHAI (佳縣上高寨區) exploration coal bed gas resources preliminary forecast is 29.52~35.42 billion cubic meters; XIZHEN( 佳縣螅鎮區) exploration area coal bed gas resources preliminary forecast is 37.68~45.22 billion cubic meters

THE CONCLUSION OF ABOVE CONSOLIDATED SITUATION ANALYSIS.

A. The North of Shaanxi province Coal Mine, XIAN SHANGGAOZHAI (佳縣上高寨區) and XIZHEN( 佳縣螅鎮區 ) exploration area have a very good coal resources and coal bed gas resources reserve. The genetic marking of coal bearing series have a lot of coal resources and are mainly for coke coal, as well as coal bed gas.

B. Preliminary calculation, The North of Shaanxi province Coal Mine, XIAN SHANGGAOZHAI (佳縣上高寨區) and XIZHEN( 佳縣螅鎮區 ) exploration area coal bed gas resources forecasted is 67.2~80.64 billion cubic meters.

 

TO BE CONTINUED...


 

     
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