Domestic innovation aids China's push for shale gas

Jereh Group's booth at a trade show in Beijing. The company unveiled the latest turbine fracturing pump on Wednesday during the 14th China International Petroleum Petrochemical Technology and Equipment Exhibition held in Beijing. Provided to China Daily

China will become the third country after the United States and Russia capable of designing and building the turbine-driven fracturing equipment that can reduce costs and cut emissions during shale gas development.

Chinese private oil and gas equipment manufacturing and engineering company Jereh Group unveiled the latest turbine fracturing pump on Wednesday during the 14th China International Petroleum Petrochemical Technology and Equipment Exhibition held in Beijing.

"Industrial experts have spent years of research in this field, achieving little progress," said Zhou Shouwei, president of China Petroleum and Petrochemical Equipment Industry Association. "The new super power fracturing pump developed by the company utilizing advanced technical innovations will significantly contribute to non-conventional oil and gas development in China."

According to the 2014 Energy Working Guidance released by the National Energy Administration in late January, China's shale gas output this year will surge to eight times as much as production levels last year. Coal-bed methane production capacity will also increase to six times the level it was in 2013.

A current obstacle is China's unique geological conditions, which create problems for non-conventional natural gas exploration.

Jereh, the first Chinese company to sell shale gas exploration equipment to the US market, has been investing in research and development for the production of core equipment that can handle China's poor road conditions and the small size of its well sites.

According to the company, its latest turbine-driven fracturing equipment possesses many advantages including a smaller footprint, lighter weight and fewer carbon emissions.

"Compared with a 2,000 hydraulic horse-power fracturing pump commonly used in China oil and gas exploitation, the new product, which has a maximum output power of 4,500 hhp, can double output power and save 82 percent of gas fuel costs undertaking the same work," said Wang Feng, a Jereh vice-president who is mainly responsible for technology.

The biggest change in the turbine-driven fracturing equipment is the use of natural gas as fuel, which can both save developers' energy costs and protect the environment, said Jiang Xiaobao, another Jereh vice-president.

He said the annual production capacity of the new turbine fracturing pump is around 100 sets, depending on orders.

Over the past year, Jereh accounted for about 55 percent of the market share of domestic fracturing equipment supplies, according to Jiang.

He said that although the price of the new equipment will be higher than previous products, clients will find it cost-effective during operations.

"The future market of the products depends on the pace of China's largest oil and gas giants' steps in the development of shale gas," he said. "I can see a boom coming in 2015 and 2016."

In addition to private companies, State-owned enterprises have also made great efforts in shale gas equipment development.

Sinopec Oilfield Equipment Corp, the largest petroleum drilling and production equipment development company owned by China's largest refiner Sinopec Group, is able to provide an integrated solution for lateral drilling, multi-stage fracturing and critical equipment and tools. It was used in the shale gas block in Chongqing.

In recent years, China's oil and gas equipment manufacturers have been actively exploring the overseas market, especially in the US, where major oil and gas companies are located.

Shaanxi Xinlong Petroleum Equipment Co Ltd, a Chinese drilling equipment provider headquartered in Shaanxi province, plans to export its first set of equipment with its own brand to the US this year.

Fu Chen, deputy general manager of the company, told China Daily during the exhibition that the company is currently working on developing shale gas exploration equipment and plans to start real production in 2015.

"The US economy is recovering. It is a great opportunity for Chinese manufacturers in the oil and gas industry," she said.

So far, up to 20 percent of Xinlong's sales revenues are from the North American market. The products are mainly drilling rigs and supporting equipment, Fu said.