ROYAL Dutch Shell and China National Petroleum have signed a 30-year deal to develop natural gas in China.
The deal came a day after a joint £2.1billion takeover bid by Shell and CNPC unit Petrochina for Australian coal-seam gas producer Arrow Energy was accepted.
Shell said yesterday the two firms would develop jointly tight-gas deposits in the 2,485 square-mile Jinqiu block in central Sichuan province. Tight gas is contained in rock which must be broken down before it can flow easily to production wells.
The block is expected to produce 2-3billion cubic metres of gas a year, with Shell taking a larger share for undertaking all the exploration risks.
China, the world’s second largest energy user, is keen to develop quickly the fuel that is cleaner than coal and oil, with consumption forecast to treble to nearly 10% of its energy needs by 2020.