GE, HongHua Group Deal to Power Rigs for China's Shale Projects
With China seeking to boost its production of unconventional gas supplies to meet Asia’s growing energy needs, GE Power & Water’s Distributed Power business and China’s leading drill rig manufacturer HongHua Group (HK 196) signed a three-year agreement Monday for GE to supply its Waukesha VHP gas engines that will power drill rigs used in new shale gas projects in China. The announcement was made at the Offshore Technology Conference being held in Houston.
In recent years, GE’s gas engine factory in Waukesha, Wisconsin, has seen orders steadily increase as more countries seek to develop their domestic natural gas resources to increase their local energy independence.
“GE’s proven Waukesha gas engines have earned industry-wide recognition for their high levels of efficiency and reliability in powering successful shale gas projects in the United States,” said Zhang Mi, chairman and president of Honghua Group. “Our agreement with GE strengthens our ability to sell more drill rigs by offering them Waukesha gas engines as a more cost effective on-site power solution.”
For GE, the agreement with HongHua—which also is the world’s second largest drill rig supplier—illustrates GE’s successful strategy to collaborate with local companies in China’s oil and gas sector in support of the country’s efforts to diversify its energy supplies.
“Our agreement with HongHua strengthens our position as a leading gas engine supplier for drill rigs in Asia as GE continues to expand its role in the global unconventional gas sector in China and other key markets around the world,” said Darryl Wilson, vice president and chief commercial officer of GE’s Distributed Power business. “Our Waukesha gas engine technology is an important part of GE’s Unconventional Solutions portfolio of products that benefit critical segments of the gas value chain.”
The Waukesha gas engines will be fueled by on-site field gas or with commercial grade gas to generate 2.8 to 3 megawatts of on-site power. By utilizing this field gas, drill rig operators will be able reduce their fuel transportation costs and optimize the availability of the rigs. With Waukesha gas-powered engines, users have the option to run almost any gaseous fuel from 950–2600 BTU. That includes everything from hot field gases, commercial grade gas, LNG, CNG and up to HD-5 propane.
GE plans to begin shipping the Waukesha units to China in May 2014, and the first pilot rig is scheduled to begin operation in September 2014.
Typical drill rigs use three diesel engines for power. GE’s Waukesha gas engines can help drill rig operators achieve significant improvements in operating efficiency and lower greenhouse gas emissions by switching from conventional diesel to cleaner-burning natural gas. For example, the utilization of gas-fired engines at gas extraction sites can save drilling operators as much as 80 percent in fuel costs compared to diesel (calculation is based on natural gas at $3/mcf and diesel at $2.65/gallon). Additionally, NOx emissions can be reduced by as much as 95 percent when powered by GE’s Waukesha VHP 7044GSI or a GE Jenbacher J320 gas engine running on 100 percent natural gas compared to a typical diesel engine.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Falcon Oil Declares Commercial Flow Test Results for Shenandoah Well
- Macquarie Strategists Expect Brent Oil Price to Grind Higher
- Japan Failing to Meet Corporate Demand for Clean Power: Amazon
- Pennsylvania County Joins List of Local Govts Suing Big Oil over Climate
- UK Oil Regulator Publishes New Emissions Reduction Plan
- PetroChina Posts Higher Annual Profit on Higher Production
- US, SKorea Launch Task Force to Stop Illicit Refined Oil Flows into NKorea
- McDermott Settles Reficar Dispute
- Russian Navy Enters Warship-Crowded Red Sea Amid Houthi Attacks
- USA Commercial Crude Oil Inventories Increase
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Oil Demand Outpaces Expectations, Testing Calculus on Peak Crude
- House Passes Protecting American Energy Production Act
- TotalEnergies Restarts Production in Denmark's Biggest Gas Field
- Republican Lawmakers Say IEA Has Abandoned Energy Security Mission
- USA Oil and Gas Job Figures Jump
- Blockchain Demands Attention in Oil and Gas
- Houthis Warn Saudi Arabia of Retaliation If It Backs USA Attacks
- Macquarie Sees USA Oil Production Exiting 2024 at 14MM Barrels Per Day
- Summer Pump Prices Set to Hit $4 a Gallon Just as Americans Hit the Road
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Chinese Mega Company Makes Major Oilfield Discovery
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Another Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Vessel Sinks in Red Sea After Missile Strike
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Equinor Makes Discovery in North Sea
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension