OREANDA-NEWS. March 03, 2011. US oil major Chevron said first natural gas production from the Chuandongbei area in southwest China's Sichuan basin is expected in 2012, with a planned maximum total output of 558,000 Mcf/day, according to the 10-K filing to the US Securities and Exchange Commission.

The company also plans to drill one exploration well for the third quarter of 2011, Chevron said in the statement filed.

The company operates and holds a 49% interest in the Chuandongbei project, while state-run China National Petroleum Corp. holds the remaining 51%.

Chevron and CNPC inked a 30-year production sharing contract for the joint development of the Chuandongbei area in December 2007.

The Chuandongbei area, which covers 1,969 sq km, stretches from the eastern part of Sichuan province to Kai county in Chongqing, and includes the Tieshanpo, Dukouhe-Qilibei and Luojiazhai gas fields.

The project includes building two sour-gas purification plants with an aggregate design capacity of 740,000 Mcf/day.

At the time of the signing of the PSC, six discoveries had been identified in Chuandongbei, with total natural gas reserves estimated at 5 Tcf.