Shale gas sector gears up in China

Two months before the expected third round of bidding for shale gas exploration rights, a Chinese firm on Friday successfully tested extraction equipment.

The equipment will operate in complex geographic conditions, according to the manufacturer, the Shenzhen-listed Yantai Jereh Oilfield Services Group Co Ltd, which is based in Yantai, Shandong province.

"The machines can be used in areas with poor roads and uneven land for long operational periods with a heavy workload," said Cui Rizhe, the director of the manufacturer's technology center.

As the country's natural gas consumption continues to rise, unconventional energy, such as shale gas, have become popular in recent years.

The United States - the world's largest shale gas producer - is expected to become an energy exporter soon, because of its large-scale and successful shale gas development projects.

According to the US Energy Information Administration, China has the world's largest shale gas reserves, estimated at 36 trillion cubic meters.

But the difficult geographic conditions in areas with shale gas blocks - a very different situation from that seen in the US - pose many obstacles for Chinese extraction projects.

The country's shale gas exploration efforts are still at a preliminary stage, with issues in terms of water consumption and technology, in addition to the geographic problems.

According to Cui, shale gas developers could save 40 percent of labor costs, 50 percent of diesel consumption and 60 percent of their water usage if they use his firm's equipment.

"The lower costs will greatly help China at the current stage of the exploration projects," Cui said.

The whole set made available by Jereh includes 15 types of equipment, providing the technology needed for the shale gas fracturing process, he said.