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Reuters: Shell and PetroChina to develop gas field

Reuters: Shell and PetroChina to develop gas field

Tue May 17, 2005

BEIJING (Reuters) – PetroChina and Royal Dutch/Shell said on Tuesday they would go ahead with the joint development of the China’s Changbei natural gas field, with Shell as the operator.

Development costs for the project over its full life cycle, including the drilling of around 50 wells over 10 years, central processing facilities and inter-field pipelines, are expected to reach around $600 million, the firms said in a joint statement.

The two have a production sharing contract for the field, which is spread across the Inner Mongolia autonomous region and Shaanxi province and has estimated reserves of 50 billion cubic metres.

It is expected to start delivering 1.5 bcm per year to markets in Beijing, Shandong, Hebei and Tianjin by 2007, rising to 3 bcm per year by 2008, the statement said.

A second pipeline for transporting the gas to Beijing is already under construction by PetroChina and is scheduled to go into operation by the middle of this year.

The firms also awarded a four-year directional drilling contract to Halliburton Energy Services (Tianjin) Ltd., but did not say how much the deal was worth.

Shell is entitled to around 50 percent of gas volumes over the 20-year project lifetime, it added.

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