China National Petroleum Corp (CNPC) and US oil major Chevron have signed an agreement to jointly develop a gas field in the northeast of Sichuan province, which would be China's biggest onshore exploration venture with a foreign company, CNPC said yesterday.

The National Development and Reform Commission (NDRC), China's top economic planning body, on Oct 29 granted approval to the two companies to develop the Luojiazhai field, CNPC said in a statement yesterday.

CNPC and Chevron will accelerate development of the field to ease energy shortages in Sichuan, said the statement.

CNPC holds a 51-percent interest in the project and Chevron takes the rest.

The field is in the Chuandongbei area, which covers nearly 2,000 sq km and has an estimated reserve of 5 trillion cubic feet. That almost doubles China's 2008 annual gas output.

The regulatory approval came almost two years after Chevron signed a 30-year production sharing agreement with CNPC to develop the area.

To support its gas operation in Sichuan, Chevron opened an office in Sichuan's Dazhou last year.

Chevron and CNPC plan to build two sour gas plants with a throughput capacity of 740 million cubic feet of natural gas per day, Chevron said last year.

China's natural gas production will be 120 billion cu m in 2011, a three-year plan (2009-11) chalked out by the National Energy Administration has outlined.

Under the plan, production would see a 58-percent increase from last year.

Under the blueprint, China will build some large oil and gas production bases over the next three years. The country will stabilize the output from oilfields in northeast China and the Bohai Sea Bay area, while speeding development of fields in the Tarim, Junggar, Erdos and Sichuan basins.

China will also work to increase its offshore oil and gas production, said the plan.