Shell, CNPC to develop Sichuan tight gas

By OGJ editors
HOUSTON, Mar. 23 –
Royal Dutch Shell PLC and China National Petroleum Corp. submitted a production sharing contract to the Chinese central government to develop tight natural gas in China’s Sichuan basin.

The companies would appraise and potentially develop tight, basin-centered gas reservoirs on the 4,000-sq-km Jinqiu block east of Chengdu in central Sichuan Province under a 30-year contract.

Shell noted that it has onshore tight gas production in China, the US, and Canada, and appraisal activities in other regions.

Shell and PetroChina, a CNPC subsidiary, already operate Changbei, another tight gas field in the Ordos basin near Yulin in China’s Shaanxi Province. Commercial production at Changbei started in March 2007, and it supplies 3 bcm/year to Beijing and other cities in eastern China.

Shell also signed a joint assessment agreement with PetroChina in November 2009 for shale gas cooperation in Sichuan. Assessment work began in January 2010 in the 4,000-sq-km Fushun-Yongchuan Block southwest of Chongqing.

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