China National Petroleum Corp. (CNPC), the country's biggest oil and gas producer, signed a 30-year contract Tuesday with U.S. Chevron Corp. to jointly develop a large gas field in southwest China's Sichuan province.
The 1,969-square-kilometer gas field, located in the northeastern part of Sichuan, has proven reserves of 175.97 billion cubic meters, making the CNPC-Chevron cooperation China's largest inland exploration project participated by a foreign explorer, said a statement from CNPC.
CNPC will hold a 51-percent interest of the project, while Chevron takes 49 percent, according to the product-sharing contract.
CNPC general manager Jiang Jiemin said that the cooperation would enable his company to make full use of Chevron's expertise in developing high-sulfur gas fields.
Developing the gas field would help CNPC meet the rising demand for natural gas in the domestic market, he said.
"The signing of the contract demonstrates our worldwide focus on large-scale exploration and production projects, and our long-term strategy to grow our business in China," Chevron CEO Dave O'Reilly said in a statement.
Chinese major oil and gas companies have discovered big gas fields in Sichuan. Sinopec's Puguang gas field, with proven reserves of 356 billion cubic meters by the end of last year, will be used to feed a pipeline from Sichuan to Shanghai, which will be completed in 2010.
Although China's natural gas output is predicted to reach 94 billion cubic meters in 2010 from last year's 58.6 billion cubic meters, the country will still need imports to fill a gap of 16 billion cubic meters annually.