It is reported that Sinopec has discovered 17 billion cubic meters of controllable gas reserves in central Sichuan about one third of the Puguang gasfield controllable reserves.

The media reported that Sinopec plans to spend half a year to conduct a 3D seismic survey exploration of the region. If the new discovery can be commercialized, Sinopec is expected to enjoy a more profitable natural gas sector.

According to CLSA the Puguang gasfield, currently China second largest producing gasfield after PetroChina Sulige will likely contribute 30 percent of Sinopec oil and gas output over the coming four years compared to the current 15%.

The Puguang gasfields gas output already reinforces Sinopec ability to ride through high oil prices and the new discovery would provide even further protection.

China plans to boost its natural gas to account for 10% of the country energy mix by 2020, up from 3% in 2005, because it is less polluting than coal and oil. China gas prices may increase between 20% and 30% under a gas pricing mechanism, expected to be launched this year.

(Sourced from www.chinamining.org)