A Chinese subsidiary of the Chevron Corporation announced on Wednesday the opening of an office in Dazhou City in the southwestern Sichuan Province to support the U.S. oil giant's local natural gas operations.

The move came after a 30 year production sharing contract (PSC) signed between Chevron and PetroChina, the listed subsidiary of China National Petroleum Corporation (CNPC), the country's biggest oil and gas producer, in December.

In Dazhou, Jim Blackwell, Chevron Asia Pacific Exploration and Production Company president, said the PSC became effective in February.

The contract, for the development of a 1,969-square-kilometer gas field in the onshore Sichuan Basin, made the CNPC-Chevron cooperation the largest inland exploration project participated by a foreign explorer in China.

CNPC will hold a 51 percent interest in the project, while Chevron takes the rest, according to PSC.

Dave Nelson, Chevron's general manager for the project and vice president for Chevron China, said a team from his company was in Sichuan and working closely with PetroChina staff.

The joint focus would be on safety, reliability and efficiency, he said.

Chevron's technology in developing high-sulfur content natural gas was the major reason it won the bid, said Li Lisheng of PetroChina's foreign cooperation department.

According to Chevron, the company and the CNPC expect to build two sour gas plants with a throughput capacity of approximately 740 million cubic feet of natural gas per day.

The gas field has natural gas proven reserves of 175.97 billion cubic meters.

Soaring energy demand and the government's support of natural gas use has boosted China's natural gas development. The country has experienced double-digit growth in natural gas output and consumption in each of the past three years.

According to China Petroleum and Chemical Industry Association statistics, China produced 69.31 billion cubic meters of natural gas in 2007, up 23.1 percent from a year earlier.

(Xinhua News Agency April 3, 2008)