Project Details - China Greatwall United Natural Gas Electric Power Co., Ltd. （Part 1）

Date：2017-09-20

       Development of Upstream Natural Gas Fields

       Stewart group is currently in discussion to own two gas fields in Montney area, BC which is the world class of natural gas exploration area. The group will play a very important role in developing the gas fields and utilization of natural gas in these areas. At present, the group’s total output in these two gas fields is about 180MMcf/D, with potential 80TCfD gas resources, there are more than 2000 net well drilled with a net area of about 170000 acres and three levels of production area.

       There are 426013 (398413 net) acres of undeveloped land, mining rights and interests of 94% on average, proven and trusted resources cycle index for 39 years, and internal assessment of each horizontal well ultimately recoverable 6 billion cubic feet equivalent gas will ensure PCS gas factory daily output of up to 80 million cubic feet for 30 years.

       Stewart has a two-year development plan to increase reserves and production.

       Development of Upstream Natural Gas Fields

       Stewart Energy Group owns or holds shares of several oil and gas companies, who have gas reserves of around 80tcf which can ensure the project gas supply for more than 50 years.

       The unit cost of natural gas is US$1.14/MMBtu(28.3m3), which includes exploitation, transportation and operation costs and taxes. If natural gas is sold at US$2.66/MMBtu， the profit would be US$1.52/MMBtu (equals to 0.35Yuan/m3). The anticipated annual sales profit is 17.2 billion Yuan (US$2.766 billion) for an annual sales volume of 30 million tons (47.65 billion m3）of LNG.

       The company is expected to be listed on the Hong Kong Stock Exchange Market, it will be traded at a price-earnings ratio of 20, its market value will be 350 billion Yuan （US$56.5 billion）.

       Natural Gas Pipeline Construction Plan

       Stewart Energy Group plans to build a 660km gas pipeline to transport gas from the gas fields to Stewart port, the diameter of the gas pipeline is 48 inches. The unit pipeline construction cost is US$4 million/km, so the total cost will be US$2.64 billion for 660km.

       One of the largest pipeline companies in Canada will be responsible for the preliminary work of the pipeline construction. China Petroleum Pipeline Bureau of CNPC will be responsible for pipeline design, material procurement and pipeline construction.

       The unit gas transportation cost is less than US$0.01/m3，if the unit transportation price is at less than US$0.02/m3，the anticipated annual profit is US$550 million for an annual capacity of 35 million tons (47.65 billion m3）of LNG.

       The company is expected to be listed on the Hong Kong Stock Exchange Market after the pipeline is built, the company will be traded at a price-earnings ratio of 20, its market value will be US$11 billion.

       Large-Scale Land Based LNG Plant Construction Plane liquefied natural gas plants on land

       Stewart Energy Group plans to build a LNG plant with 6 liquefaction units, the annual capacity of each unit is 6 million tons of LNG and the cost of each unit is US$6 billion, the total investment cost for 6 units is US$36 billion.

       The unit profit of natural gas liquefaction is US$0.5 /MMBtu，the anticipated annual profit is US$0.86 billion (5.3 billion Yuan) for an annual capacity of 36 million tons (1.73 billion MMBtu) of LNG.

        The company is expected to be listed on the Hong Kong Stock Exchange Market, it will be traded at a price-earnings ratio of 20, its market value will be 107 billion Yuan (US$17.2 billion)