FTS International said on Tuesday it has signed a 15-year joint venture with China's Sinopec Group in a first-of-its-kind partnership that brings the U.S. company's expertise in hydraulic fracturing to China's vast shale formations.
Stymied by the cost and complexity of tapping shale gas, China has struggled in its bid unlock what may be the world's largest shale gas reserves by emulating the U.S. shale boom.
The joint venture company, called SinoFTS Petroleum Services Ltd. will be owned 55 percent by state-owned Sinopec and 45 percent by FTSI upon incorporation in China. Financial terms were not disclosed.
"Sinopec will be a key strategic partner for us, and we see a long, successful venture ahead, working together in a country poised to develop as the world’s largest unconventional oil and gas producer,” Greg Lanham, FTS International's chief executive officer, said in a statement.
FTS International, based in Fort Worth, characterized the partnership as the first oilfield services collaboration between a non-Chinese well-completion company and a Chinese national oil company.
Sinopec for the first time began pumping shale gas from test wells in commercial quantities in the Fuling area in southwest China last fall. It said in March it aims to develop shale gas production capacity of 5 billion cubic meters (bcm) by 2015 and 10 bcm by 2017.
FTS International is one of the largest U.S. providers of equipment and services to complete wells drilled into shale or other rock formations. Singapore's sovereign wealth fund Temasek is the FTS International's largest shareholder.