US major Chevron expects to start up its Chuandongbei sour gas project onshore China in 2015, a further delay from its last target of late 2013, the company indicated in a filing to the US Securities and Exchange Commission last week.
The project has faced repeated delays since it was originally slated to come online in 2010, partly because it is a complex field with high hydrogen sulfide content. Development has also reportedly been held up due to problems with partner alignment at the project.
Chevron operates and holds a 49% stake in the production sharing contract for the block, which is located in the central Sichuan province. State-owned partner China National Petroleum Corp. owns the remaining 51%.
Earlier pegged at $4.7 billion, the cost of the project had ballooned to $6.4 billion by last year.
Chevron did not give a reason for the delay, but said it continued construction on both natural gas processing plants last year. The overall project will have capacity of 558,000 Mcf/d. The first plant's initial three trains have a design capacity of 258,000 Mcf/d, and the first train is targeted for mechanical completion this year, the company said.
"The full development includes two sour gas processing plants connected by a natural gas gathering system to five fields," Chevron said.
Chevron began construction of the project's first natural gas purification plant in 2010 and started developing the Luojiazhai and Gunziping gas fields after signing the PSC in 2007.
In the exploration segment, Chevron said it drilled two wells for shale gas in the Qiannan Basin in 2013 and both were unsuccessful. The company had started acquiring seismic data at the acreage in southwestern Guizhou province in July 2011.
Offshore China, it drilled one exploration well in deepwater block 42/05 in the South China Sea late last year and early this year and it too was unsuccessful, the company said.
This is the second unsuccessful well in the deepwater South China Sea to be reported recently. Anadarko Petroleum had announced a duster in block 43/11 early this month after drilling began in the fourth quarter last year.
Chevron said its net production in China last year averaged 20,000 b/d of oil equivalent, mainly from other offshore projects.
