Page last updated at 10:36 GMT, Tuesday, 23 March 2010

Shell and China's CNPC sign 30-year gas discovery deal

China steel factory
The pace of China's growth is sucking in energy resources

Royal Dutch Shell has strengthened its ties in China with a 30-year deal to explore for natural gas in the country.

The Anglo-Dutch energy giant will partner China National Petroleum Corporation (CNPC) in the project.

The deal follow's this week's joint bid with PetroChina, owned by CNPC, for Australia's Arrow Energy gas company.

Shell has been expanding its search for gas assets rapidly, and the deal secures the company a strong presence in resource-hungry China.

Under the agreement, which still needs clearance from the Beijing government, Shell and CNPC will initially search for gas in a 4,000 sq km area in the Sichuan province.

"The agreement will strengthen our partnership with CNPC in developing cleaner energy to meet China's growing needs," said Malcolm Brinded, Shell's executive director of upstream operations.

On Monday Shell and PetroChina struck an agreed $3.1bn (£2.1bn) takeover of Arrow Energy, a coal-seam gas company in Australia.

Shell and PetroChina already operate Changbei, a gas field in the Ordos Basin in Shaanxi province, which began commercial production in March 2007 and now supplies 3bn cubic metres per year.

And in January the two companies began assessing a shale gas field in Sichuan.

It is thought that Shell is also considering investing in new oil refineries in China.

"We're open to other discussions here if that will materialise," said Shell chief executive Peter Voser at a news conference in Beijing.

China is the world's second-largest oil and gas consumer after America, and has agreed a string of deals around the world to import resources.

Print Sponsor

Shell and PetroChina up Arrow bid
22 Mar 10 |  Business
China oil demand is 'astonishing'
12 Mar 10 |  Business
China in huge Venezuela oil deal
17 Sep 09 |  Americas

The BBC is not responsible for the content of external internet sites

Financial TimesShell deepens Chinese ties with CNPC gas pact - 14 hrs ago
CHINAdaily CNPC, Shell join forces on Sichuan natural gas project - 14 hrs ago
Times Online BG Group agrees record $40bn deal to export coal-seam gas to China - 15 hrs ago
Oil and Gas Journal Shell, CNPC to develop Sichuan tight gas - 21 hrs ago
South China Morning Post Shell, CNPC sign Sichuan gas deal - 31 hrs ago
* May require registration

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Americas Africa Europe Middle East South Asia Asia Pacific