Royal Dutch Shell said it has signed a production sharing contract with China National Petroleum Corporation (CNPC) for developing a shale gas block in southwestern Sichuan province, the first such deal in China.

Shell has already done some exploration works on the Fushun-Yongchuan block that covers 3,500 square kilometres.

"Shell will apply its advanced technology, operational expertise and global experience in the project to jointly develop the shale gas resources with CNPC," the Anglo-Dutch firm said in a release on its website, without giving any further details.China is at the very early stage to tap its shale gas resources and the government wants to identify the right technology to unlock its potentially large shale gas resource in the next few years, aiming for a leap in shale production by 2020.