SINGAPORE, Chinese state-owned oil and gas giant Sinopec Group has signed a contract to explore a natural gas block in Algeria that may hold significant shale gas reserves.
The agreement, signed earlier this week between Sinopec International Petroleum Exploration & Production Corporation (SIPC) and Algeria’s state energy firm Sonatrach, covers the exploration and development of the Guern El Guessa II (GEG) block. The block spans 36,000 square kilometres in the Gourara-Timimoun Basin in southwestern Algeria and was awarded to Sinopec last month through an international tender.
Sinopec, formerly known as China Petrochemical Corp, stated in June that while the GEG block has proven conventional gas resources, it also shows strong potential for shale gas development.
Before submitting its bid, Sinopec conducted extensive evaluations of the block, drawing on its technical expertise and integrated capabilities in unconventional oil and gas exploration. The company is one of China’s pioneers in shale gas development, operating the Fuling field in southwest China — the country’s largest shale gas project.
The GEG deal follows a previous US$850 million agreement in February, under which Sinopec and Sonatrach partnered to jointly develop the Hassi Berkane-North field.
Separately, another Chinese energy firm, Zhongman Petroleum and Natural Gas Company (ZPEC), announced this week that it has also signed a contract to explore and develop Algeria’s Zerafa II natural gas block, after securing the tender last month, according to an official statement on its WeChat platform.
