History

Primeline Petroleum Corporation was originally established by the Hwang family to capitalise on upstream petroleum business opportunities generated by China's dynamic economic growth.

In December 1994, PPC signed a petroleum contract with CNOOC for a contract area of 4,500 sq km in the East China Sea known as Block 32/32.

PPC assigned 75% of its interest in the petroleum contract for Block 32/32 to Primeline Energy Holdings Inc and Primeline's shares were listed as PEH on the Vancouver Stock Exchange, which has since become the TSX Venture Exchange in Canada.

In 1997, Primeline made the LS36-1 gas discovery and became the first international oil company to discovery a commercial quantity of gas in the East China Sea. Primeline joint-ventured with CNOOC on the appraisal of the discovery in 2000 and 2001, but, due to the then natural gas market conditions in China, did not proceed with the development of LS36-1 at that time.

In March 2005, the petroleum contract for Block 32/32 was allowed to lapse and Petroleum Contract 25/34 was entered into. Block 25/34 encompassed a larger area while including the material parts of the original Block 32/32.

In March 2010, Primeline and CNOOC signed various agreements relating to the LS36-1 Development under which CNOOC elected to take its full participating interest of 51% in the LS36-1 gas field, so that the respective participating interests in the development of and production from the gas field are 51% CNOOC, 36.75% Primeline and 12.25% PPC. The development and operating costs were agreed to be borne by the parties in their respective participating interests save that Primeline would not be required to fund any development costs until after final government approval of the development. The operatorship for the development and production operations for the LS36-1 gas field was transferred from Primeline to CNOOC.

In June 2012, Petroleum Contract 33/07 was entered into allowing Primeline to continue the exploration work in the same area under a better coordinated rolling development and exploration program.

The final approval required for the LS36-1 Development - the Overall Development Program - was granted by National Development and Reform Commission (NDRC) in May 2014.

First gas on the LS36-1 gas field ("LS36-1 Development") began on July 16th 2014.

The Gas Sales and Purchase Contract was signed on October 29th, 2014 (the "Gas Sales Contract") between CNOOC China Limited ("CCL"), a subsidiary of China National Offshore Oil Corp, and Zhejiang Gas for the sale of gas from LS36-1 on the basis of the fixed price, take or pay gas sale agreements with Zhejiang Gas originally dating back to 2008. The parties to the Gas Sales Contract are CCL (acting for itself and as agent for Primeline) and Zhejiang Gas. The terms of the Gas Sales Contract were the basis for Primeline's US$274 million syndicate facility signed the following month and from which Primeline repaid CNOOC for the carried share of the development cost in December 2014.