Shenzhen-listed Linzhou Heavy Machinery Group is still negotiating with Henan Provincial Coal Seam Gas Development and Utilisation over the Xiu Hill shale gas block in Chongqing in southwest China, Linzhou representative Cao Qingping told Interfax on Monday.

The companies signed a letter of intent last July for Linzhou to farm into the block, for a stake no bigger than 25%, and carry the cost of future exploration and development after Henan CSG was penalised for not meeting investment obligations for the block.

Cao said Linzhou is still unsure how much it will invest to enter the block.