Worldwide Energy News - Article

Chevron to lend expertise to major gas project in Sichuan Basin - China

A 30-year Production Sharing Contract has been signed by Chevron (49%) and CNPC (51%) that lays the groundwork for the development of the Chuandongbei project in the Sichuan Basin. As operator, Chevron is expected to provide technological expertise and an "emphasis on safety" to the development, which includes the Luojiazhai sour gas field. In 2003, 243 people were killed in a development drilling accident in that field, while in 2006 some 15,000 people had to be evacuated. China's initial efforts to secure a foreign partner were unsuccessful due to Luojiazhai's safety issues and its close proximity to highly populated areas. Therefore, a total of about 2,000 sq km were made available, including the Tieshanpo and Dukouhe-Qilibei fields. Chevron, which outbid Shell, Statoil and Total, said resources are estimated at 5 Tcf and design capacity of proposed gas plants is expected to be 740 MMcfg/d. Given the fact that Chevron was involved in a bidding war with the Chinese for Unocal just a couple years back, the Financial Times noted that the PSC illustrates ". . . Beijing's pragmatic approach to exploiting the resources needed for its fast-growing economy."

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