Shale gas sector gears up in China

A shale gas exploration firm already has shown interest in leasing the equipment, Jiang Xiaobao, Jereh's vice-president, told China Daily on Friday. He declined to disclose the name of the potential client.

Jereh - the only Chinese firm that supplies shale gas equipment to North American companies - has been developing machines in recent years tailored for Chinese projects, hoping to seize business opportunities during a boom in the sector.

The company exported shale gas fracturing equipment to the US in 2011.

Jereh's exports will account for about 40 percent of its total revenue in 2013, but its long-term goal is to expand that figure to 60 percent in the next five to six years, said Cheng Yongfeng, the company's board secretary.

"We'll expand to markets including Russia, Central Asia, the Middle East and Kazakhstan in the future to achieve that goal," he said.

The third round of bidding for China's shale gas exploration rights is expected to be held by the end of the year, and its scale will surpass the total of the previous two rounds, said an industry observer close to the Energy Research Institute of the National Development and Reform Commission.

"In the technology sector, China has made some breakthroughs which will help it cut exploration costs," said a report from Sublime China Information Co Ltd, a domestic commodities consultancy.

In the previous two rounds of bidding, the companies' level of actual exploration after winning the bids was much lower than expected, which has raised some questions.