CHINA National Petroleum Corp, the nation's largest oil company, and Chevron Corp have begun exploring for gas in southwestern Sichuan Province to tap rising demand for the cleaner-burning fuel.
Operations at the Chuandongbei field will start next year and gas output may reach two billion cubic meters by 2010 and six billion cubic meters by 2013, China National said.
The project is the nation's largest onshore oil and gas exploration venture with a foreign company, it said. In December, Chevron, the second-largest United States oil producer, beat Royal Dutch Shell, Statoil and Total to win the right to develop sour gas reserves at Chuandongbei. The San Ramon, California-based company and China National have signed a 30-year accord on the field estimated to hold five trillion cubic feet of natural gas.
China National wants to introduce Chevron's technology in exploring high-sulfur gas, the Beijing-based oil producer said. Chevron, which has a 49 percent stake, is the operator in the project.
The area covers almost 2,000 square kilometers and includes the Tieshanpo, Dukouhe-Qilibei and Luojiazhai gas fields.
Chevron is pursuing increased gas and exploration activities in China, two and a half years after the company won a tussle with CNOOC Ltd for control of Unocal Corp.