Jan. 17 (Bloomberg) -- PetroChina Co.'s Longgang natural gas field may have twice the reserves of Puguang, the nation's largest gas field run by rival China Petroleum & Chemical Corp., a government official said. PetroChina's stock rose 3.9 percent.

Longgang in the southwestern province of Sichuan has proven reserves of between 700 billion and 750 billion cubic meters, the official told reporters in a briefing in Beijing today, asking not to be identified because of government rules. China Petroleum's Puguang, also in Sichuan, had proven reserves of 356 billion cubic meters at the end of 2006.

PetroChina, the country's biggest oil producer, has yet to make an official announcement on the discovery. Chairman Jiang Jiemin said in March the company will announce a major gas discovery at the Longgang area by the end of last year. Production from the field could reach 4 billion cubic meters a year by 2010, the China Securities Journal said May 28.

The Longgang field ``could boost PetroChina's existing proven reserves by at least 20 percent,'' Gordon Kwan, head of China energy research at CLSA Ltd., said in e-mailed comments.

PetroChina's shares, which had dropped as much as 2.5 percent earlier, ended the day 3.9 percent higher at HK$12.38, outpacing a 2.7 percent gain in the benchmark Hang Seng Index.

Biggest Discovery

``This is easily the biggest gas discovery in Southeast Asia'' since 2007, said Mark McCafferty, head of Southeast Asian energy research at Wood Mackenzie Consultants Ltd. ``Depending on the production rates, the field could be producing for two to three decades.''

China's oil producers are stepping up gas exploration to meet the nation's target of doubling the use of the cleaner- burning fuel by 2010. China's economy expanded 11.5 percent in the third quarter of last year, boosting energy demand.

PetroChina and Newfield Exploration Co., a U.S. natural- gas producer, signed a joint study agreement late last year to develop the Weiyuan gas field in Sichuan, Ding Sheng, chief representative of Newfield's China unit, said in a speech handed out to delegates at an industry conference today.

The companies aim to complete the joint study by 2010. Ding is scheduled to deliver the speech at the conference in Beijing tomorrow.

Separately, China will start building a fifth emergency oil stockpile in the southwestern city of Chongqing, the government official added today.

To contact the reporter on this story: Wang Ying in Beijing at ywang30@bloomberg.net; Ying Lou in Hong Kong at ylou1@bloomberg.net.

Last Updated: January 17, 2008 06:01 EST