The Changbei project is the first onshore upstream project initiated by Shell in China and also the largest project launched by PetroChina with foreign investors. It is hoped to market Changbei gas to Beijing, Tianjin, Hebei, Shandong and other east China provinces.

The project will be put into operation in 2004. Upon completion, the project will annually supply 3 billion cubic meters of natural gas to eastern areas of China within 20 years.

The gas field is located in the Shaanxi and Inner Mongoila provinces with proven reserves of 70 billion cubic metres. Full realisation of the project, including gas development, pipeline construction and associated power generation would need total investment approaching $3 billion. Some $27mn will initially be spent on the evaluation phase to establish commercial viability.

PetroChina and Shell have already begun marketing activities. A joint pre-feasibility study for the pipeline routing is starting, and this will incorporate the results of further gas marketing activities. The gas pipeline network from the Ordos Basin will form a key part of China's long-term gas distribution plan. China is planning to build a 4,200-km gas pipeline linking major northwestern gas fields to markets in eastern provinces.