Rig mobility on the fast track

Chinese company's technical breakthrough enables faster turnaround times for energy companies

With the global hunt for energy now shifting to more unconventional sources such as shale gas, coalbed methane and shallow oil prospects in deserts, engineering companies are finding that it pays to have drilling rigs that are sophisticated and highly mobile.

The challenge is even greater in the Middle East, where rapidly changing weather and difficult desert terrain makes it tough for companies to extract energy from unconventional sources.

However, Shandong Kerui Machinery Manufacture Co Ltd, a Chinese engineering firm, seems to have found an answer to such complex problems and will soon put its fast-moving rigs on the market.

The portable mobile rigs, 55 meters tall and weighing about 450 tons, are equipped with fast moving transport systems that enable quick extraction, say Shandong Kerui officials. "The first Shandong Kerui rig will be put into operation in Saudi Arabia in the next three months," says the chief engineer of the Chinese company.

"It will be the first time that a technology created by a Chinese company has been used in the Middle East," says Xu Yimin, chief engineer of Shandong Kerui Machinery Manufacture Co Ltd.

"Our rig has proven capabilities in desert operations, ability to withstand high temperatures and to operate in difficult terrain."

Equipped with eight tires, each three meters in diameter, the rig can be moved within 50 kilometers without being disassembled. "The new rig will save costs and cut transportation time by at least four days," Xu says.

The Chinese company has already tasted success by selling some of its rigs to the Oman-based international drilling contractor Dalma Energy.

"We teamed up with Kerui as we found that their products suit our expectations and come with considerable cost benefits," says Wolf Hempel, assistant project manager, Dalma Energy.

Located in Dongying, a city in Shandong province and home to China's second largest oilfield, Kerui has more than 2,000 employees focused on research and development. The company earmarks roughly 5 percent of its annual turnover to research and development, the company says. That in turn, has helped the company sell its products in more than 60 countries and regions.

A decisive point for the company has been recent global moves by Chinese energy companies. These have contributed to a healthy demand for the Kerui engineering products and rigs, say company officials. Kerui Group's turnover rose by more than 50 percent every year between 2007 and 2013, when it was 11 billion yuan ($1.77 billion), of which $1 billion came from the overseas market.

Kerui teamed up with the Houston-based Cameron International Corporation in 2012 to develop equipments for non-conventional energy extraction, the company says.

Xu says demand for the company's products have also come from the domestic market as more Chinese companies look for ways to tap non-conventional energy sources.

According to the 2014 Energy Working Guidance issued by the National Energy Administration in January, China's shale gas output this year will surge to 1.5 billion cubic meters, eight times more than the production levels achieved last year. Shale gas output is expected to reach 6.5 billion cubic meters by the end of 2015. Coal-bed methane production capacity will also see a six-fold growth from the 2013 levels during the same period, the report said.

Kerui is not the only Chinese engineering company that is championing innovation. Oil and gas equipment manufacturing and engineering company Jereh Group last month unveiled its latest turbine fracturing pump, making China the third country after the United States and Russia to have such products.

The turbine-driven fracturing equipment can reduce costs and cut emissions during shale gas development.

zhaoruixue@chinadaily.com.cn

(China Daily Africa Weekly 04/18/2014 page20)