Sino Gas And Energy Holdings Limited (ASX:SEH) First Gas Compressed Into Compressed Natural Gas Facility During Pilot Commissioning

Perth, April 12, 2011 AEST (ABN Newswire) - Sino Gas And Energy Holdings Limited (ASX:SEH), an Australian Company focused on developing Chinese Gas Assets, is pleased to announce that it has successfully compressed first gas into a CNG tanker during Pilot commissioning.

The commissioning on the SJB03 well with PetroChina Coal Bed Methane (PCCBM) follows the signing of a Joint Gas Marketing Agreement with PetroChina in late February 2011.

Sino Gas Managing Director Stephen Lyons commented that he was very pleased that Sino Gas is continuing to make substantial progress towards the development of the Sanjiaobei PSC Gas Assets.

"We have been working very closely with PCCBM to plan the Pilot and commissioning is a welcome next step in that program.

The Pilot is an important step towards development as it provides data on the longer term well performance for input into the Chinese Reserves report process", said Mr Lyons.

Sino Gas drilled the SJB03 Gas Discovery Well in Q4, 2010 and perforated the 1st pay zone in late December 2010. That pay zone successfully flowed gas without the need for further stimulation.

In preparation for the Pilot Program, during March 2010 the SJB03 well was tested for around 1 week and flowed gas at a relatively stable rate of around 250,000 scf/day: similar to that obtained in the December 2010 test.

Based on the successful longer term test Sino Gas will now produce from the 1st pay zone as part of the Pilot Development rather than seek to enhance productivity from this zone through fracture stimulation at the current time.

Under the arrangements being formalized with the Pilot equipment provider and PCCBM, the Pilot equipment provider is responsible for providing all equipment and facilities and for the loading of gas.

Sino Gas will conduct site supervision of the SJB03 Pilot in line with its role as Operator on the Sanjiaobei PSC with its costs mainly limited to personnel associated with this activity.

Sino Gas is also working with PCCBM in a joint negotiation with the gas buyers for the sale of CNG produced as part of the Pilot program. It is expected that these negotiations will be completed shortly. It is also expected that the full commissioning of the Pilot on the SJB03 well will be completed within the week.

Additional wells will be added to the Pilot as they are completed.

2011 Work Program Planning is directed at the Chinese Reserves report Sino Gas is also completing the 2011 work program planning on its Linxing and Sanjiaobei PSC's and is in the process of reviewing tender submissions relating to that program.

The program which is directed at lodging the Chinese Reserves report as a key step towards development is expected to include further well testing, the drilling of new wells, continuation and expansion of the Pilot developments and relevant study work.

It is expected that Sino Gas will award contracts during April 2011 with the field work expected to start soon after that process is completed.

Further updates will be provided as this program is confirmed.

Contact

Stephen Lyons Managing Director Sino Gas & Energy Tel: +86-139-1148-1669 +86-10-6530-9260 Email: slyons@sinogasenergy.com Gavin Harper Executive Director Sino Gas & Energy Email: gharper@sinogasenergy.com http://www.sinogasenergy.com