BEIJING (Dow Jones Newswires), November 10, 2008
French oil major Total SA and Chinese state oil company PetroChina Co. are close to giving the go-ahead to develop a major natural gas block in northwestern China, after exploration and evaluation lasting two and a half years.
The Sulige South block covers an area of 2,390 square kilometers.
It is part of the Sulige field, one of the most resource-rich areas in China and itself part of the giant Changqing oil and gas field.
Sulige has proven reserves of more than 534 billion cubic meters, according to a statement on CNPC's Web site.
In 2006, Total and PetroChina signed a production-sharing contract for the evaluation, development and production of natural gas in the block which at the time had proven reserves of more than 100 billion cubic meters.
"This is a highly challenging project due to the very tight nature of the gas reservoirs, at circa 3,500 meters in depth," said Total in its China Web site.
Total has proven expertise in gas an oil reserves at great depth, in areas with difficult terrain and in developing reserves with high sulfur content, the Web site said.
PetroChina says it expects gas output from the Sulige field to grow to 20 million cubic meters a day by end 2008.
Earlier this year, CNPC said output at the Changqing was expected to reach 30 million metric tons of oil equivalent by the end of 2009.
In June this year, PetroChina put China's largest natural gas processing plant into operation at the Sulige field, a unit capable of processing 5 billion cubic meters of natural gas a year. It has another smaller processing unit in operation and plans to build a third one.
The gas from the field is both piped to Beijing and used to serve local needs.
PetroChina also has an agreement with Royal Dutch Shell PLC to assess gas reservers in a nearby area.
Copyright (c) 2008 Dow Jones & Company, Inc.
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