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Oil giant Sinopec Corporation has announced that further exploration at Puguang, one of China's largest natural gas fields, has led company officials to revise proven oil reserves upwards to more than 500 billion cubic meters.

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"The gas field in southwest China's Sichuan Basin is enormous and is expected to be producing 12 billion cubic meters of natural gas annually by 2008," said Sinopec.

The techniques used to discover and explore the gas field won the company China's technological progress prize for 2006 last week.

"The discovery is not only good news for the Sichuan Basin, it will also provide a model for exploration in other fold-thrust belts worldwide," said Sinopec representative Guo Tonglou.

The Puguang gas field, which now covers 86 square kilometers, was discovered in 2003 in northeast Sichuan.

Sinopec will invest 40 billion yuan to explore and develop the Puguang gas field, which is worth hundreds of billion of yuan.

The company will build a pipeline to supply natural gas from Puguang to Shanghai, the country's financial hub in east China.

The gas field is expected to be in operation in May 2007.

Prior to Puguang, China only had four natural gas fields with deposits exceeding 200 billion cubic meters, the report says.

Puguang will make a massive contribution to the country's thirst for natural gas, experts say.

(For more biz stories, please visit Industry Updates)