Royal Dutch Shell Plc signed with Sunwing Zitong Energy Limited, a wholly-owned subsidiary of Canada-based Ivanhoe Energy Inc, to acquire 100 percent of Sunwing's interest in the Zitong natural gas block in China's Sichuan province.

Shell confirmed that the deal has been approved by the Chinese government, according to a statement e-mailed to China Daily on Wednesday.

However, the company didn't disclose the value of the deal.

It said the two parties have also signed a Zitong Production Sharing Contract Amendment Agreement with China National Petroleum Corporation and Mitsubishi Gas Chemical Company Inc to acknowledge the transfer of interest.

The Zitong natural gas block has an area of 1,001 square kilometers, and lies 20 km to the north of the Jinqiu block in the Sichuan basin.

As the operator, Shell has 90 percent of participating interests and MGC 10 percent during the exploration and development phases.

The exploration of the project has been conducted for about 10 years.

"We are very happy about this new development with our cooperation with CNPC on the gas front," said Lim Haw Kuang, executive chairman of Shell China. "This is another good step forward for our gas development business in China."