By OGJ editors
HOUSTON, May 19 -- PetroChina Co. Ltd. and Shell China Exploration & Production Co. Ltd. have signed letters of intent for development of Changbei natural gas field in Shaanxi Province and the Inner Mongolia Autonomous Region in China.
The joint venture expects to invest about $600 million in development work including construction of central processing facilities, interfield pipelines, and drilling of about 50 horizontal and multilateral wells over 10 years.
Shell, which will be operator under a production-sharing contract with PetroChina, awarded a 4-year directional drilling contract to Halliburton Energy Services (Tianjin) Ltd. and a 3-year contract for drilling fluids and associated services to the Engineering Technology Institute of Changqing Petroleum Exploration Bureau.
The contract for drilling rigs and associated services covering the drilling of about 30 wells over the next 6 years was awarded to a drilling company affiliated with Liaohe Petroleum Exploration Bureau.
The joint venture also signed a letter of intent (LOI) to award engineering, procurement, and construction (EPC) of the central gas processing facility to a consortium of China Petroleum Engineering Co. Ltd, Southwest Co., and Sichuan Petroleum Engineering Construction Co. Ltd.
China Liaohe Petroleum Engineering Co. Ltd. received an LOI for an EPC contract to develop the field gathering pipeline infrastructure.
The field is expected to begin delivering 1.5 billion cu m/year of natural gas to Beijing, Shandong, Hebei, and Tianjin by 2007 and as much as 3 billion cu m/year by 2008. Shell will receive 50% of the gas volumes during the 20-year project.
PetroChina's second Shaan-Jing gas pipeline to Beijing is under construction and scheduled to go online by midyear.
