By OGJ editors
HOUSTON, May 7 -- A unit of Burlington Resources Inc., Houston, has signed a field development-linked natural gas purchase and sales agreement with PetroChina Company Ltd., marking the first long-term agreement of its kind in China.
The agreement is a first step toward developing a market for substantial natural gas resources discovered on the Chuanzhong Block in the Sichuan basin in central China.
The agreement covers a large natural gas field known to have several trillion cubic feet of potentially recoverable resources in tight sands reservoirs, with remaining potential awaiting evaluation.
Burlington Resources China Ltd. operates the 1.8 million-acre block with 100% interest. PetroChina is China's largest national oil and gas company.
"We are excited by the potential found thus far in the block and by the cooperation displayed by PetroChina and the Chinese government," said Bobby S. Shackouls, Burlington's chairman, president and CEO.
"The field's characteristics are a perfect fit with our substantial expertise in conducting major basin-centered gas development programs and maximizing production from tight, gas-saturated reservoirs.
With a population of 1.4 billion people and one of the world's fastest-growing economies, China represents an appealing market for natural gas."
Burlington acquired its interests in the block during 2001 and anticipates filing a development plan for the block's first field, Bajiaochang, during the fourth quarter of 2002, with development to follow in 2003.
Peak production would not occur for several years, pending expansion of the area's existing pipeline infrastructure and development of gas markets.
China is a growing focus area in Burlington's international program. The company is also active in offshore oil development in the Pearl River Mouth basin area of the South China Sea, 100 miles south of Hong Kong.
Burlingtonalso is a partner with China National Offshore Oil Corp. in the Panyu oil development project on Block 15/34, which contains the Bootes and Ursa fields and an estimated 75 million bbl of reserves.
Fabrication is under way on two offshore platforms as well as a floating production, storage, and offloading vessel at Panyu. Burlington owns 24.5% interest and expects net peak production of 17,500 b/d of oil to begin in late 2003.
