Chevron, PetroChina partner in Sichuan gas fields

Chevron has won a bid to become PetroChina's partner in developing four natural gas fields in China's southwestern Sichuan province, according to state media.

Eric Watkins
Senior Correspondent

LOS ANGELES, Aug. 8 -- Chevron Corp. has won a bid to become PetroChina's partner in developing four natural gas fields in China's southwestern Sichuan province, according to state media.

The official China Securities Journal, citing industry sources, said the agreement includes Luojiazhai field, which has natural gas reserves of 58.11 billion cu m, with average sulfur content of 7.13-10.49%.

PetroChina is seeking to tap foreign expertise in extracting sulfur from the gas, the report said. The Chinese firm also is concerned about the deterrent effect on investors of accidents that have occurred at the field and in the region.

In December 2003 a blowout occurred at a Luojiazhai gas well, killing 243 people and injuring more than 2,000 nearby residents and workers, and in March 2006 gas leaked from the field's No. 2 Luojia well, forcing the evacuation of thousands of people.

PetroChina estimates there are some 89 households living within 500 m of each well drilled at its high-sulfur gas fields in Sichuan—a point of concern for investors.

When China's first offer of tenders in Luojiazhai and 12 blocks in the Tarim basin attracted little attention due to the proximity of densely populated areas, the bidding round was sweetened to include Tieshanpo and Dukouhe gas fields, which are reported to have combined reserves of 73.3 billion cu m.

Contact Eric Watkins at hippalus@yahoo.com.

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