Global oil and gas titan Royal Dutch Shell Group is to inject $600 million into a joint venture project to develop an onshore gas field in China.

The decision by Shell to make a major investment in China comes after the successful conclusion of long running negotiation with its Chinese partner PetroChina Co, to develop the Changbei field in northwest China for sale to provinces and cities to the east of the reserve.

Shell will use its $600 million over the course of the next few years to set up the venture, including drilling around 50 wells, and for operation costs, for which it has responsibility. For its part, PetroChina, the largest oil company in the China, will build a pipeline that will carry the gas to its designated markets of Beijing, Tianjin, Hebei and Shandong.

Production from the Changbei field is projected to begin in 2007, while Shell hopes to be processing three billion cubic meters of gas a year by 2008. According to a joint release from the two companies, Shell will have rights to about half of the gas volumes produced from the Changbei project for a period of 20 years.