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PetroChina Signs Pipeline Deal

July 4, 2002

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HONG KONG (AP) _ PetroChina Co. signed joint venture agreements Thursday with Royal Dutch/Shell Group, Exxon Mobil Corp. and Russia’s Gazprom for a pipeline linking gas fields in western China with Shanghai in the east.

The deal followed an agreement Saturday between the three foreign joint venture partners to each take a 15 percent stake in the 2,440-mile pipeline project. Fellow mainland energy company Sinopec Corp. will take a 5 percent stake, with PetroChina, China’s largest oil and gas producer, holding the remainder.

Under Thursday’s agreement, the companies will cooperate for 45 years, investing a total of $8.5 billion in both the pipeline and in exploration and production, Wang Fucheng, executive director of PetroChina, told reporters in Hong Kong.

The pipeline alone will account for $5.2 billion of the total investment, Wang said.

``The pipeline will be a major contributor to future revenues,″ Wang said, adding that full construction was beginning Thursday.

PetroChina said it chose to work with Shell, Exxon Mobile and Gazprom because of the companies’ international track record, financial strength, and technical and operational experience.

Company executives said the company is also discussing possible gas imports with Gazprom.

Update hourly