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Chevron signs deal in China

December 19, 2007|From Bloomberg News

Chevron Corp., the second-largest U.S. oil producer, and China National Petroleum Corp. agreed Tuesday to jointly produce natural gas from an area in southwestern China, tapping the Asian nation's rising demand for cleaner-burning fuel.

The companies signed a 30-year accord in Beijing on the Chuandongbei area, estimated to hold 5 trillion cubic feet of natural gas, Chevron said. The San Ramon, Calif.-based company, operator of the project, will have a 49% stake, it said.

Demand for natural gas in China, the world's second-biggest energy user, is rising as the government seeks to cut pollution and reliance on oil.

The partners will build two natural gas treatment plants able to process a daily volume of 740 million cubic feet of sour gas, or gas with high sulfur content, Chevron spokeswoman Nicole Hodgson said.

Chevron and PetroChina Southwest Oil and Gas Field Co., a subsidiary of China National Petroleum, will begin the first phase of the project in early 2008.

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