In March last year, Royal Dutch Shell and China National Petroleum Corp (CNPC) announced plans to jointly develop and produce natural gas in China's Sichuan basin. The companies submitted a production sharing contract to the Chinese central government for approval. Under the 30-year contract, Shell and CNPC agreed to appraise and potentially develop tight gas (basin-centred gas) reservoirs in an area of approx. 4,000 sq km in the Jinqiu Block of central Sichuan Province.

'This is another step forward for Shell's world-wide tight gas strategy, building on our technology and production track record in China and elsewhere,' said Malcolm Brinded, Executive Director of Upstream International said at the time. 'The agreement will strengthen our partnership with CNPC in developing cleaner energy to meet China's growing needs'.

Shell and PetroChina, a subsidiary of CNPC, also operate Changbei, another tight gas field in the Ordos Basin near Yulin in Shaanxi Province of China. Commercial production in Changbei began in March 2007, supplying 3bcm natural gas a year to Beijing and other cities in eastern China.

Shell also signed a joint assessment agreement with PetroChina in November 2009 for shale gas cooperation in Sichuan. Assessment work commenced in January 2010 in the Fushun Block that covers another area of approx. 4,000 sq km.

Source: www.ordons.com