Energy giant BP has signed a deal on shale gas production with a Chinese company.

The “sharing contract” with China National Petroleum Corporation (CNPC) is for shale gas exploration, development and production in the Neijiang-Dazu block in the Sichuan Basin.

It was signed by BP’s CEO Bob Dudley and CNPC’s Chairman Wang Yilin.

CNPC will be the operator of the project which covers 1,500 square kilometres.

The deal also covers possible future fuel retailing ventures in China, exploration of oil and LNG, carbon emissions trading as well as sharing of knowledge around low carbon energy and management practices.

Mr Dudley said: “We are looking forward to working together with CNPC on technology, operational and subsurface techniques in unconventional resources. We will bring our worldwide experience to our first unconventional gas project in onshore China with CNPC. We will combine this with CNPC’s knowledge and experience to bring gas to China’s growing clean energy market.”