ARCO, Chinese Leaders Celebrate Startup of China's Largest Offshore Natural Gas Project

abarrelfullabarrelfull wrote on 06 Aug 2012 13:01
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10 January 1996
LOS ANGELES — Startup of China's largest offshore energy project, the Yacheng 13-1 natural gas field, was celebrated in Beijing, China, today at ceremonies attended by Chinese government leaders, former President George Bush, and an ARCO (NYSE:ARC) delegation headed by Chairman and Chief Executive Officer, Mike R Bowlin.

"We are honored that Chinese President Jiang Zemin, Premier Li Peng and Vice Premier Zou Jiahua have joined in celebrating this historic event," said Bowlin, whose company discovered the field in the South China Sea 13 years ago.

"The success of this $1.13 billion project reflects well on the future development of China's vast reserves of hydrocarbons," Bowlin added.

"We are also honored that President Bush, whose formal links with China came during the same era when ARCO began its commitments, returned to Beijing to celebrate completion of this milestone project."

A week-long series of startup celebrations will conclude on 13 January in Hong Kong where most of the Yacheng gas (approx 280-million cubic feet per day) will be delivered for use in electric power generation by Castle Peak Power Company, a joint venture of China Light & Power Company and Exxon Energy Ltd.

"The Yacheng 13-1 project combines the two great forces of Western business initiative and an intense desire by the Chinese people for rapid industrial growth," said former President Bush. "As a veteran of the energy industry, I salute all who made this dream a reality."

The Yacheng field has estimated reserves of more than 3-trillion cubic feet of gas, most of which will be transported to Hong Kong through a 480-mile pipeline, the second longest subsea pipeline in the world. A second pipeline will supply natural gas to local industries on Hainan Island some 60 miles away.

The project was jointly developed by China National Offshore Oil Corp (51%), ARCO China, Inc (a subsidiary of Los Angeles-based ARCO (34.3%), and Kuwait Foreign Petroleum Exploration Co (14.7%). ARCO is the operator.

In 1982, ARCO became the first foreign company to be awarded rights to explore for oil and gas off the coast of China. The Yacheng discovery came a year later. In 1994, ARCO signed the 100th offshore exploration agreement betweeen China and a foreign energy developer.

"We have business interests in more than 50 countries, but our commitment to China is one of our most important priorities," said Bowlin "Over the years, we have demonstrated this commitment by investing significant capital and technological expertise and by taking an active role in meeting the region's future energy needs."

In addition to Yacheng 13-1, ARCO is exploring for oil and gas in the South and East China Seas. It also has explored coal-mining activities in Shenfu and Donsheng and has a 9.9% interest in Zhenhai Refining and Chemical Company Ltd, an oil refinery complex in East China.

ARCO has operated in the Asia-Pacific Region since the late 1960s. In addition to China, the company has significant oil and gas producing operations in Indonesia and is one of the largest coal producers in Australia. ARCO Chemical Company, in which ARCO holds an 83% interest, also does significant manufacturing and marketing in the region.


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