Shell Expected To China's Run Kela-2 Gas Field

Shell is expected to run one of China's leading gas fields Kela-2, a key supplier to the planned $20 billion West-to-East gas pipeline project, a PetroChina official said. PetroChina has agreed in principle to allow Shell to operate the Kela-2 field and four other condensate fields in northwest Xinjiang Uighur Autonomous Region for the first two years of operation, the official said. "It was agreed in that way, although nothing has been inked in this regard," the official stated. PetroChina would take over as operator of the fields after the two years, he said.

PetroChina is working with a Shell-led foreign consortium towards a framework deal to develop gas resources in China's northwest, laying a 4,000-km trunkline and moving gas to eastern economic hubs around 2004-2005.

In a non-binding agreement signed in December, the Shell consortium will take a 45 percent stake in the massive plan which costs more than $20 billion. The Chinese side holds the remainder. Kela-2 field, in the gas-rich Tarim Basin, has a certified proven gas reserve of 250 billion cubic meters (bcm).

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