China’s state oil and gas major Sinopec Group said it has signed a contract to explore a natural gas block in Algeria that potentially holds large shale gas resource.

The contract was signed earlier this week between Sinopec International Petroleum Exploration & Production Corporation (SIPC) and state-run Algerian oil and gas company Sonatrach.

The North African country last month awarded Sinopec via an international tender to explore and develop block Guern El Guessa II, or GEG, which has an area of 36,000 square kilometers, located in the Gourara-Timimoun Basin in southwestern Algeria.

Sinopec, formerly known as China Petrochemical Corp, said in June that the GEG block has proven conventional gas resource but potentially also holds sizeable shale gas resource.

Before bidding, Sinopec conducted multiple rounds of evaluations of the target block by “fully leveraging on company’s expertise and integration” in developing unconventional oil and gas resource, Sinopec said in its in-house newspaper in June.

Sinopec is one of China’s earliest shale gas developers, operating flagship Fuling field in China’s southwest that is the country’s single-largest shale gas project.

The GEG contract follows an earlier $850 million deal in February in which Sinopec and Sonatrach agreed to jointly explore and develop Hassi Berkane-North field.

Independent Chinese firm Zhongman Petroleum and Natural Gas Company also signed a contract this week to explore and develop Zerafa II natural gas block in Algeria, following a tender award last month, ZPEC said on its official WeChat platform.

Source: Reuters