China Gengsheng Minerals, Inc. announced that it has signed a $1.46 million fracture proppants supply contract with China National Petroleum Corporation Jidong Oil Field in Tangshan, Hebei province.
According to the contract, Gengsheng will start shipping the medium- density and high-strength fracture proppants, as well as the high-density and high-strength ones immediately through the end of 2008. Fracture proppants are used by oil and gas drillers to extract pockets of oil and natural gas scattered underground. The high-density and high-strength kind of proppants are considered a more technologically advanced product and Chinese oil companies currently source them mostly from overseas manufacturers.
This is the second product sales contract Gengsheng has signed with CNPC this month. On June 4, 2008, it announced a $1.6 million fracture proppants contract with CNPC's Jilin Oil Group in Jilin province.
Overall, Gengsheng has inked a total of $5.3 million contracts from April to June 2008 to supply fracture proppants to major Chinese oil companies, including CNPC, China National Offshore Oil Corporation, and China Petroleum and Chemical Corporation.
"Our fracture proppants business continues to grow at a faster pace than we expected," said Shunqing Zhang, Chairman, CEO and President of Gengsheng. "We expect that this momentum in fracture proppants sales will help us meet our 2008 commercial objectives."
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