Shell signs gas contracts for East China Sea
20 Aug 2003
Shell has finalised an agreement to explore, develop and market natural gas, oil and condensate in the East China Sea.
Shell company Pecten Orient will take a 20% shareholding in the project, which comprises three exploration and two development contract areas of the Xihu Trough covering approximately 22,000 square kilometres.
The other partners are the China National Offshore Oil Corporation (CNOOC) and Sinopec, which have a 30% interest each, with Unocal East China Sea holding a 20% interest. CNOOC will be the operator of all five contract areas and will establish the Xihu Oil and Gas Operating Company.
The five contracts were signed yesterday at the Great Hall of the People in Beijing.
The first development under the contracts will be the Chunxiao development area, where offshore production facilities are expected to come on stream in mid 2005. Production is expected to reach 2.5 billion cubic metres per year within two years.
The production facilities will process natural gas, oil and condensate from wells to be drilled in the Chunxiao, Tianwaitian, Can Xue, and Duanqiao fields. A 350-kilometre subsea gas pipeline is to be laid to an onshore terminal in Ningbo, Zhejiang Province. The natural gas will be marketed jointly by the contract partners to users in East China.
The oil and condensate will be exported via a 60-kilometre pipeline to the Pinghu oil platform.
Construction of the Chunxiao production facilities has already started. The partners are now discussing the exploration and development of the other contract areas.
