Petrochina To Develop Six New Gas Fields To Increase Throughput To West-East Pipeline

PetroChina has plans to develop six natural gas fields in the Tarim Basin to provide additional throughput to the planned West-East Pipeline, according to company officials.

The six fields in the northern area of the basin contain about 300 billion cubic meters of proven gas reserves, or about 57% of the total proven gas reserves in Tarim. The fields slated for development are Yakela 2, Yinmaili, Yangtake, Jilake, Yaha and Yudong, he said. PetroChina plans to jointly develop these fields with Shell and ExxonMobil. Shell and ExxonMobil have agreed to take a 15% stake each in PetroChina's gas pipeline project which also includes gas production in Tarim and gas utility projects in the East.

The project will ultimately require a total investment of US$20 billion, including US$3.3 billion for gas field development in the Tarim and Ordos basins. Gas fields in the Ordos basin also will supply gas to the pipeline. Sinopec Corp. will develop the Yakela gas field in the Tarim basin. Gas from the Tarim basin in northeastern China's Xinjiang region will be transported to cities in eastern China including Shanghai beginning in 2005 following completion of the second section of the pipeline in early 2004. By the end of last year, PetroChina had confirmed 526.7 billion cubic meters of gas reserves in Tarim. However, gas production last year was only 1.2 billion cubic meters which equates to 3.6% of China's total gas output. This is due to the lack of gas markets.

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