Why Chevron’s Huge China Project Has New Delays

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Nearly four years after Chevron (NYSE:CVX) expected to be producing gas in China with PetroChina (NYSE:PTR), the pair’s huge Chuandongbei investment is still not bearing fruit. According to Reuters, disagreements between the energy giants have forced production dates back until summer of 2014 at the earliest while the Chinese government is holding out on appproval for later stages.

Sources who relayed information to Reuters about the latest delay cited the difficulty in turning the “sour gas” fields of Chuandongbei into usable energy. Sour gas is a type of natural gas that contains high levels of sulphur, making extraction and processing of the materials a unique skill even among leading energy providers.

Chevron is making a move no outside company has matched with its sour gas project in China. According to Reuters, the alliance with PetroChina made the U.S. corporation the only foreign business taking a chance with the sulphur-rich material, though the two collaborated on a similar project in Australia in 2007. Tbe latest complications in Chuandongbei have caught the attention of Chinese government officials.

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