Changbei Gas Field Now in Commercial Production

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Researched by Industrial Info Resources (Sugar Land, Texas). The Natural Gas Treatment Plant at the Changbei Gas Field went into formal production and started natural gas supply a few days ago. This project is a joint venture between Petrochina Company Limited (NYSE:PTR) and Shell Oil Company (NYSE:S) (Houston, Texas). Gas production is expected to stabilize at 3 billion cubic meters per annum by 2008. The Changbei Gas Field is China’s largest onshore natural gas cooperation project, and it will primarily supply natural gas to Beijing, Tianjin and the Hebei province.

The Changbei Gas Field is located at the edge of the Maowusu Desert in the northeast of the Eerduosi Basin. It spans across the border of Shaanxi and the Inner Mongolia Autonomous Region. Petrochina and Shell have an agreement to jointly explore the gas field and share the product. It is also the largest onshore upstream project Shell is involved with in China. At present, Shell is the developer at the gas field.

In 1999, Petrochina and Shell signed an agreement to develop the Changbei Gas Field and started research and preparation. In May 2005, Petrochina and Shell jointly announced that the two parties formally started the exploration of Changbei Natural Gas Project. Considering the difficulty in extracting gas from Changbei and in an effort to attain the production goal, Shell fully utilized its global technology, especially use of long multi-lateral horizontal wells. After two years of hard work, Changbei started gas supply to the No. 2 Shaanxi-Beijing Gas Line at the end of 2006. The launch of the Changbei Natural Gas Treatment Plant marks the start of commercial production of the Changbei Gas Field, which is one year ahead of the original schedule.

The timely and safe commercial production at Changbei does not only testify to the successful cooperation between Petrochina and Shell, but it also provides another stable gas source to the “Move Western Gas to the East” project. So far, the infrastructure construction at Changbei has already achieved the capacity of 3 billion cubic meters per year.

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