China reports major gas find in northeast Sichuan basin

Mumbai: China has reported one of the country's largest natural gas finds at Puguang, which has led to a substantial revision of the country's proven oil reserves to over 500-billion cubic meters.

The Puguang gas field, in northeast Sichuan basin, in southwest China is expected to yield 12-billion cubic meters of natural gas annually by 2008, China's oil giant Sinopec Corporation said.

"The discovery is not only good news for the Sichuan Basin, it will also provide a model for exploration in other fold-thrust belts worldwide," a Sinopec source said.

Sinopec will invest $5.06 billion (40 billion yuan) to develop the Puguang gas field, Xinhua news agency reported.

The company also plans to build a pipeline to supply natural gas from Puguang to Shanghai, the country's financial hub in East China.

The Puguang gas field, which covers 86 square km, was discovered in 2003 and the techniques used to discover and explore the gas field had won Sinopec China's technological progress prize for 2006.

Puguang is expected to make a massive contribution to the China's thirst for natural gas, which so far only had four natural gas fields with deposits exceeding 200 billion cubic meters.

The gas field is expected to be in operation in May 2007