PetroChina and Chevron began production at an onshore natural gas field in China's southwest at the end of 2015, PetroChina's parent said on Monday, after years of delays. The Luojiazhai field, whose 'A' well began operating on Dec. 30, has an annual production capacity of 3 billion cubic metres of gas, the state-controlled China National Petroleum Corp said in a statement on its website.

Luojiazhai is part of the $6.4 billion Chuanbeidong project, a tricky sour gas development in the Sichuan basin that contains a high level of hydrogen sulphide, which made for higher operational risk and higher standards for technical processes. Chevron, an experienced sour gas developer, is the operator of the project, and holds a 49 percent stake. PetroChina holds the rest.

PetroChina initially expected first gas to be delivered in 2010, after a deal was signed with Chevron in 2007. The project, a 2,000 sq km block, has proven reserves of 176 billion cubic metres, the two companies have said.

Background

According to information on the Chevron web site, Chevron operates the 487,000 acre (1,969 sq km) Chuandongbei natural gas area in the onshore Sichuan Basin with a 49% interest in project. The full development includes two sour gas processing plants connected by a gas gathering system to five natural gas fields. In 2014, the company continued construction of the first natural gas processing plant and development of the Luojiazhai and Gunziping natural gas fields. The first plant’s initial three trains have a design outlet capacity of 258 million cubic feet per day. The first train reached mechanical completion in late 2014, and commissioning work began. Startup was expected in 2015. The project has a total design capacity of 558 million cubic feet of natural gas per day.