The International Energy Agency this week said that Chinese
demand for natural gas would double in the next five years,
which is expected to drive demand for minerals used in
Driven by booming demand, the "Golden Age" of natural
gas that is now firmly established in North America will expand
to China over the next five years, the IEA said in its
Medium Term Gas Market Report, released on Tuesday.
Although the IEA claims that liquefied natural gas (LNG)
will meet much of this demand, a new report,
Chinas Proppants Market Raw Material, Supply, &
Consumptionwhich has been
produced by IM Research, shows that China
could well rely on its unconventional gas supply.
report, which is written by independent consultant Eileen
Hao, summarises that China is pursuing three main
unconventional resource routes which will help stimulate
fracking activity: coal bed methane (CBM), coal-to-gas (CTG) or
synthetic natural gas (SNG), and shale gas and shale oil.
China to overtake the US in shale
Like the IEA, IM Research found that China
could well overtake the US in terms of gas production.
worlds largest technically recoverable shale gas
resources at 1,111 trillion cubic feet (68% more than the US),
and hosting the worlds third largest shale oil reserves
at 32 billion barrels of oil, China, is going to be the next
major unconventional oil and gas resource market after the US,
and eventually exceed it, the report states.
While hydraulic fracturing (fracking) remains a
relatively new and emerging drilling technology in China which
has yet to come to large scale commercial fruition, exploiting
the reserves is advancing RAPIDLY.
Chinese oilfield service companies are
learning, developing, adopting, and innovating techniques and
equipment to vastly improve the countrys hydraulic
fracturing abilities, as well as partnering with global majors
such as Schlumberger, the
exploration and production companies are forging partnerships
with international oil companies in staking and evaluating
unconventional oil and gas resources, as well as increasing
their shale gas production targets for 2015, it adds.
which is the first and only definitive report on Chinas
oil and gas proppants market, covering frac sand and ceramic
proppants, states that China has abundant shale gas and shale
oil potential in seven prospective basins: Sichuan, Tarim,
Junggar, Songliao, the Yangtze Platform, Jianghan, Ordos, and
Subei. Most of Chinas proven shale gas resources are in
the Sichuan, Tarim, and Ordos Basins.
for now, activity limited
this, IM Research
explains, actual fracturing activity in China has been
limited. Shale gas production in 2012 was only 1.8 bcf from
test drilling in the Sichuan basin. During 2013, only 140-150
exploratory wells were drilled.
Chinas fracturing industry is in its infancy, it ranks
second in world hydraulic pumping capacity, having
overtaken Canada in 2013. Chinas current total fracturing
pumping capacity is about 2.6m HHP (hydraulic horsepower),
about 10.6% of world capacity.
Most of the pumping
capacity is owned by Chinas leading state-owned oil and
gas companies: China Petroleum & Chemical Corp.
(Sinopec), PetroChina Co. Ltd (part of China National Petroleum
Corp. (CNPC)), and Shaanxi Yanchang Petroleum (Group) Corp.
In China, the
proppant market is about 3m tonnes, IM
Research explains. Of this, frac sand proppants take
up 55% of the current market by volume mainly owing to their
lower cost, leaving ceramic proppants with 40%, and
resin-coated proppants with around 5%.
Total consumption of
ceramic proppants in the Chinese domestic market was about
1.2m tonnes in 2013, in which high strength ceramic proppants
consumption was about 30% of total.
Frac sand is mainly
produced in Inner Mongolia, Fujian, and Henan provinces. Inner
Mongolia Changfan Silica Sand Co. Ltd is the largest frac sand
producer with 60,000 tpa capacity.
There is only known
to be one resin coated proppant plant in China, Santrol
(Yixing) Proppant Co. Ltd, a joint venture with Yixing Orient
Petroleum Proppant Co. Ltd and US-based Santrol Proppants, part
of US frac sand major Fairmount Minerals.
Meanwhile, there has
been a boom in ceramic proppant production, with around 100
ceramic proppants in China.
In 2013, the total
production capacity of ceramic proppants in China was estimated
at 4.5m tpa and total production estimated to be 2.05m
Click here for more
information on the Chinese Proppant Report and to contact a
member of our team