Weir Says China to Get Locally Made Shale Gas Equipment in 2012

Weir Group Plc, the world’s biggest maker of pumps for the mining industry, said China’s state-owned oil explorers are expected to be among the first users of locally made shale-gas equipment starting next year.

Weir, which formed a venture with local partner Shengli Oilfield Highland Petroleum Equipment Co., will start testing manufacturing facilities at their plant in Dongying in Shandong province in the first quarter of next year, Chris Poole, divisional vice president of engineering at Weir Oil & Gas, said today in an interview in Beijing. Production will start after the tests are completed, he said.

“Initially, it will be mostly assembly facilities,” said Poole, declining to reveal the plant’s capacity. “For assembly facilities, there will be just floor and people.”

Most of the equipment to be manufactured in the Dongying factory will go to Shengli Oilfield Highland’s clients, including China National Petroleum Corp., China Petrochemical Corp. and China National Offshore Oilfield Corp. Weir, based in Glasgow, Scotland, owns 60 percent in the venture that was formed in November 2010, while Shengli Oilfield Highland holds 40 percent.

Shale gas is extracted using hydraulic fracturing, a process in which millions of gallons of chemically treated water and sand is forced underground, breaking up the rock to free trapped gas.

China currently doesn’t produce shale gas commercially. The U.S. Energy Information Administration said in April that Chinese shale may hold 1,275 trillion cubic feet of gas, 12 times the country’s conventional natural gas resource.

(Bloomberg)