Total Fina Elf SA, Europe's third-largest oil company. will probably invest in China's biggest natural gas find to tap growing demand in the country after it completes a study of the potential reserves in the field in Inner Mongolia.
It signs an agreement with PetroChina Co. to study the field, known as Sulige. Tests have proven reserves of more than 220 billion cubic meters. China may pipe Sulige gas 900 kilometers to Beijing or to Shanghai, more than 1,000 kilometers away.
Total is going to inveat millions dollars and further is ready to spend much more. It may help Total catch up with larger rivals Royal Dutch/Shell Group and BP Plc in China.
Shell, which plans to invest $5 billion in China by 2005, is in talks to invest in the Changbei field in Inner Mongolia. It wants a stake in a pipeline to pump the gas to Beijing, where demand is expected to more than quadruple to 6 billion cubic meters a year when the city hosts the Olympics in 2008. BP, Europe's top oil company, signed a similar agreement to study the Sulige field. Shell, Exxon Mobil Corp. and OAO Gazprom signed an agreement in July to each take a 15 percent stake in a $5.2 billion pipeline to send gas to Shanghai from northwestern Xinjiang.
The companies would also have the same share in the Xinjiang gas fields supplying the pipeline.