PetroChina and Shell Sign Gas Pipeline Deal
PetroChina and Shell have entered into a preliminary agreement for an $18 billion gas project which includes a 4,000-km gas trunkline to run from the west to the east of China. The agreement, signed on December 31st in Beijing, marks China's biggest investment in the energy sector.
Shell and Russian gas giant Gazprom were in the foreign consortium, which will take 45 percent in the project. PetroChina will hold 55 percent. The deal includes exploration and development of gas fields in the Xinjiang Uighur autonomous region, as well as construction of the trunkline from Xinjiang to Shanghai.
A Shell spokesman based in Beijing declined to confirm the signing of the deal but said negotiations between Shell and PetroChina had "achieved significant progress." The huge project has strong backing from the Chinese government and is estimated to cost some 150 billion yuan ($18 billion).
The trunkline will ship gas from the barren Xinjiang deserts in western China to the prosperous east coast, transferring some of the wealth from prosperous eastern provinces to achieve sustainable economic growth in undeveloped western regions.