China National Petroleum Corporation (CNPC) and Royal Dutch Shell plc (Shell) today announced plans to jointly develop and produce natural gas in China’s Sichuan basin.

The companies have submitted a production sharing contract to the Chinese central government for approval. Under the 30-year contract, Shell and CNPC would appraise and potentially develop tight gas (basin-centred gas) reservoirs in an area of approximately 4,000-square-kilometre in the Jinqiu block of central Sichuan Province.

Tight gas is natural gas contained in rock that must be fractured or broken open before it can flow easily to production wells.

“This is another step forward for Shell’s world-wide tight gas strategy, building on our technology and production track record in China and elsewhere,” said Malcolm Brinded, Executive Director of Upstream International. “The agreement will strengthen our partnership with CNPC in developing cleaner energy to meet China’s growing needs.”