FTS inks China JV with Sinopec

Joint venture: FTS in Chinese tie-up with Sinopec

Texas-based well-completion specialist FTS International has signed a 15-year joint venture agreement with Sinopec to help develop unconventional resources in China.

The joint venture, dubbed SinoFTS Petroleum Services, will be 55% owned by Sinopec and 45% owned by FTS.

"SinoFTS is the first oilfield services collaboration of its kind between a non-Chinese well completion company and a Chinese national oil company," FTS said in a statement, adding that the agreement is "the culmination of a multi-year effort by both companies to bring FTS’ hydraulic stimulation capabilities and expertise to China".

Other major services companies are also active in China. Last month, Weatherford announced a tie-up with Sinopec Oilfield Service and Shengli Highland Petroleum Equipment to offer services to shale drillers in China.

SinoFTS is different because FTS provides only completion services while larger piers like Weatherford and Baker Hughes offer entire suites of oilfield services, FTS spokeswoman Pam Percival said.

SinoFTS, which will be based in Beijing, will also offer services not only to Sinopec but to other exploration and production companies throughout China.

The venture will initially focus on the Sichuan basin, which has some of the most promising resources in a country that is thought to have among the world's biggest shale deposits.

Rough terrain in the mountainous Sichuan basin has made shale production difficult there to date.

FTS, one of the top hydraulic fracturing companies in the US, said it will use specialised newbuild equipment to handle the geographical challenges specific to China. The equipment "featuring the latest innovations" will be manufactured at FTS facilities in the Fort Worth, area of Texas.

Operations in China are expected to start next year.

China has set lofty goals for shale gas production across the country, with targets of 6.5 billion cubic metres per annum by 2015 and between 60 Bcm and 100 Bcm by 2020.

"China has vast untapped shale gas resources, and we're eager to play a role in their development," said FTS chief executive Greg Lanham.

"Just as FTS was born out of the emergence of the US unconventional energy industry, we expect that SinoFTS will enhance the development of China's domestic energy renaissance."

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