PetroChina, Sinochem form venture to tap Chinese shale gas
PetroChina (PTR +6.4%) says it is teaming up with Sinochem (SHI +5.3%) to tap shale gas from five blocks in the southwest of China.The new entity plans to spend 26B yuan ($4.2B) to tap the five shale blocks, which total 15.6K sq. km in size and are mostly located near Chongqing.
The project will start operations by the end of the year and begin commercial production in 2017.
The venture should “substantially increase shale gas exploration in Chongqing” to the benefit of all partners and the local economy, said Sun Zhengcai, Chongqing’s top official, according to the Chongqing Daily, the city’s official newspaper.
PetroChina owns 40 percent of the new project. Chongqing’s State Development and Investment Corp., Sinochem, and the Chongqing Institute of Geology and Mineral Resources hold 39 percent, 20 percent and 1 percent respectively, according to a report from the 21st Century Business Herald newspaper.
China is believed to hold the world’s largest technically recoverable shale gas reserves but development is at an early stage.