(EnergyAsia, January 4 2013, Friday) — China Petroleum & Chemical Corporation or Sinopec, and US oil and gas company ConocoPhillips have begun a joint study to explore and develop in western China’s Sichuan basin over the next two years, the two companies have announced.

Sinopec Exploration Southern Co, a subsidiary of the Chinese state-owned major and Asia’s largest refiner, said the partners signed the agreement last month city to explore, develop and produce shale gas in a 3,917-km area in Qijiang in Sichuan province.

“This cooperation will be of great significance to the general evaluation on the exploration potential of the marine Paleozoic shale gas in the southeast Sichuan area and will help improve Sinopec’s technology in the exploration and development of shale gas,” said Sinopec.

According to both the Chinese and US governments, China holds the world’s largest reserves of unconventional gas. China’s resource ministry estimates the country holds as much as 25.1 trillion cubic metres of shale gas reserves, sufficient to meet more than 200 years of its domestic demand. The US Energy Information Administration has a higher estimate of 31 trillion cubic metres.