A Conferencing Interview with the Green Dragon Gas Person : Mr. Randeep Grewal

 

Since it has been a burning issue in China for a long time, here we are connecting with the amazing person - Mr. Randeep Grewal who is the founder and head of the Greka Group and Green Dragon Gas.

This interview with him will give us quite a good idea of the current scenario of the gas matter in China.

Let's see his view on the various topics mentioned below.

About the Gas business in China.

•As said by him, China has been very much focused on gas. According to Randeep, when he first came to China there was no gas, rather there was only coal. He refers to it as an interesting journey since the mid-90s. He also mentions that regardless of who came to power in the central government, their allegiance to gas has always been smack on.

•From the year of 2005 only, Beijing has presented unconventional gas producers preferential policies which includes refunds on value-added tax that are collected from gas sales, dispensation from equipment import duties, and free-market gas valuation.

Regarding the Government playing in the Background.

•Green Dragon Gas has signed a deal with CNPC at the Greka Chenzhuang block. Also there has been another key deal with the CNOOC subsidiary. As explained by Mr. Randeep, these supplementary deals which have been done are basically for quantifying a carried interest or value from the wells that CNOOC drilled five years ago. Though it is not much related to government policy, they offer a subsidy of only $1.65 per MMscf for gas produced from coal that is almost half of the Henry Hub price. This clearly indicates the firmness of the government behind it.

Main buyers of GDG.

•The main buyer is CNPC. As CBM is open to the market by law, Randeep mentions that they can sell to whoever they choose to. So, they sell to Petro China, CNPC and the local industry there.

•He also details that they compress some of the gas and sell it as transport fuel. Their CNG station sites are commendatory to their operations in the Shizhuang South in Shanxi. They also have distribution centers in Henan. He told that they used some of the gas to be used in a power plant.

Regarding the Rise in Production of Gases.

•Though Randeep clearly pronounces that the rise in production of the gas is expected over the next few years with all the gas wells already lined up, the growth rate might look a bit odd.

•He says that they have 1339 wells in the ground at their GSS block which is GDG’s biggest venture till date. But out of those 1339 wells, only 400 are currently selling gas. So, they have almost 1000 wells coming onstream very soon. There were several wells waiting for the agreements to be signed before going on-stream. And the agreement with CNOOC has just been endorsed. Therefore, the next year is going to be very exhilarating and stimulating for them on this particular block alone.