Pacific Asia China Energy Inc.

Pacific Asia China Energy Inc.

May 23, 2006 09:30 ET

Pacific Asia China Energy Inc.: Asia Canada Energy and Alberta Research Council to Commence Research Study for Enhanced CBM Development in China

KELOWNA, BRITISH COLUMBIA--(CCNMatthews - May 23, 2006) - Pacific Asia China Energy Inc. (PACE) (TSX VENTURE:PCE) is pleased to announce that the Company's subsidiary, Asia Canada Energy Inc. (ACE) and the Alberta Research Council Inc. (ARC), in Edmonton, will commence a cooperative research study that will technically evaluate the potential for coalbed methane (CBM) and/or enhanced CBM development (ECBM) on the Company's CBM concession in Guizhou Province, China. The work will be conducted by the Canadian Consortium on Enhanced Coalbed Methane Recovery which is led by ARC. Other consortium members are Computer Modelling Group, Sproule International Ltd., SNC Lavalin, Calfrac Well Services Ltd., Precision Energy Services and Porteous Engineering Ltd. The study also includes ACE's partner in developing the project, the China United Coalbed Methane Company (CUCBM).

The evaluation is part of a larger coal seam study of ECBM technology/CO2 sequestration in China in which the Chinese partner is CUCBM. This process involves the injection of CO2 into coal seams to enhance the CBM recovery process as well as to permanently store CO2 in the seam and avoid its release to the atmosphere.

The primary focus of this joint study is to provide a geological and engineering evaluation for potential CBM development on ACE's CBM concession in Guizhou province, China. ACE will provide all pertinent data as required by ARC and its consortium members in order to complete a geological, engineering and production evaluation. In addition, the consortium members will conduct an ECBM/CO2 sequestration feasibility study on selected ACE coal properties located in Guizhou province.

The evaluation of the Company's CBM concession in Guizhou Province is to be completed by September 30, 2006.

This news release may contain forward-looking statements. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.

PACIFIC ASIA CHINA ENERGY INC. is a Canadian based resource company specializing in the strategic development of Coal Bed Methane projects in China. Common Shares of PACIFIC ASIA CHINA ENERGY INC. are listed on the TSX Venture Exchange under the symbol "PCE".


Dev Randhawa, President and CEO

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.

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