Oil and gas company Sino Oil and Gas Holdings Limited ("Sino Oil and Gas Holdings", the "Company", HKEx: 702) today announced the commencement of piped sales of coalbed methane (CBM) from the Sanjiao block in Shanxi Province. The project is jointly developed by Orion Energy International Inc. ("Orion"), the Group's wholly-owned subsidiary, and its PRC partner, China National Petroleum Corporation.

Trial gas delivery through pipelines conducted on 5 December 2012 was met with success and signified the first delivery of piped gas for the Sanjiao CBM project. Up to the date of this release, pipeline operation has been stable. The realization of piped gas sales will remove the project's dependence on CNG truck delivery, and marks a new milestone in the project's development.

This new pipeline was built and funded by a local enterprise in Shanxi Province, and is designated to supply gas for residential and industrial users in Linxian. Downstream pipelines in support of gas delivery from the Sanjiao project will subsequently be built and put into operation. As the pipeline network is gradually completed, sales from the Sanjiao block are expected to achieve substantial leaps in growth, driving a new phase of development for the project.

Sino Oil and Gas Holdings CEO Mr. Xu Zucheng said: "Trial CNG sales have begun since August 2011, and with the commencement of piped gas sales, the bottleneck that constrains large-scale external sales is eliminated. Looking forward to 2013, we will drive further CBM production and sales with a view to generating significant revenues for the Group."

About Sino Oil and Gas Holdings

Sino Oil and Gas Holdings Limited (HKEx: 702) is an energy company with a key focus on oil, coalbed methane (CBM) and conventional natural gas. The Group is committed to building a portfolio of oil and gas assets and operations with the aim of developing into one of the leading independent oil and gas companies in Greater China. The Group currently operates oil and gas fields in Shaanxi and a CBM project in Sanjiao Block in the Erdos Basin of China.