E&P company Primeline Energy has received the full payment due under the recently agreed settlement of the dispute with Zhejiang Gas in relation to the gas sales contract for LS36-1 (GSC), off China.
The settlement agreements were signed in early March between Primeline and CNOOC China Ltd (CCL) and CCL with Zhejiang Gas relating to the dispute Primeline had with Zhejiang Gas regarding the price payable under the gas sales contract.
Primeline said on Friday that, following the execution of the agreements, Zhejiang Gas paid the overdue amount in full to CCL and Primeline, applied to withdraw the arbitration proceedings against Zhejiang Gas before the China International Economic and Trade Arbitration Commission (CIETAC).
CIETAC formally confirmed the termination of the arbitration proceedings on March 21, 2017, and Primeline has received RMB 256 million ($37.2 million) net of VAT for its share of all outstanding, unpaid or partly paid amounts due to the end of 2016 including take-or-pay payments for 2015 and 2016; plus a sum of RMB 12 million ($1.7m) relating to the difference between the agreed price and the price previously paid from January 1 to February 28, 2017.
These payments represent the full and final settlement amount due in settlement of the dispute with Zhejiang Gas.