BEIJING, March 23 (UPI) -- Royal Dutch Shell and China National Petroleum Corp. reached a 30-year deal Tuesday to develop so-called tight gas located in central Sichuan province.
Shell and CNPC operating on a 1,544-square-mile site in the Jinqiu block in central Sichuan province will examine and appraise the potential to develop tight gas.
Tight gas, similar to shale deposits, is locked in rock formations that must be cracked open to exploit natural gas reserves.
Shell and CNPC subsidiary PetroChina operate a tight gas field in the Shaanxi province of China under an existing deal. Gas production there began in 2007, delivering more than 100 billion cubic feet of natural gas to Beijing and eastern China per year.
In addition, Shell and PetroChina were assessing shale gas potential in Sichuan province in January under the terms of a deal signed in 2009.
The tight gas deal for Sichuan was submitted to the Chinese government for approval.
