Responsible Unconventional Gas Operating Principles in Practice, Sichuan, China

Shell has published a set of five aspirational global onshore tight sand/shale oil and gas operating principles that provide a framework for protecting water, air, wildlife and the communities in which we operate. We design our activities using state-of-the-art technology and innovative approaches that make the most sense for local conditions. This paper outlines Shell‟s implementation of these principles in the assessment and development of a Basin Centred Gas play in partnership with PetroChina in a block in Sichuan Basin, China. The 4,106 km2 block lies in the heart of the Sichuan basin, sometimes referred to as the “bread-basket” of China. The area is intensively farmed and is characterized by very hilly topography with problematic access. Population densities are 500-600 people per km2. The partners are executing a 3-year, 21-well appraisal program designed to evaluate the gas potential and commerciality of the block. A successful Development stemming from this appraisal would allow for an extended production period under the auspices of a PSC. Hundreds, if not thousands of wells, could ultimately be drilled. Operating presents unique challenges from a surface perspective because of the potential impact of our operations on local communities. In accordance with the onshore operating principles, Shell China has developed and implemented a number of operating methodologies that ensure we operate our wells and facilities safely, minimize the footprint of our operations, ensure water and air quality and properly engage with local communities. These methodologies, challenges, success factors and future plans to expand them and further mitigate impacts are discussed in detail.