China has been steadfast in pursuing its shale ambitions. It has concluded two auction rounds to award shale blocks and the state-owned companies have entered into joint ventures with international shale players to develop targets.

Arguably, Royal Dutch Shell has emerged as the front runner with the company recently winning government approval for its production-sharing contract with China National Petroleum Corp, which also paves the way for $US1 billion investment in developing unconventional sources.

Shell and CNPC have drilled about 24 wells, with another 14 planned for this year. The country’s 12th Five Year Plan envisages shale gas production to reach 6.5 million cubic metres by 2015.

However, despite an ambitious shale production agenda, China’s shale dream has been stymied by lack of technology to drill in difficult geological settings.

Joint ventures such the Shell-CNPC deal highlight the need for technology transfer. Already, oil service companies such as Schlumberger, Baker Hughes and Halliburton have made their presence felt.

There has been much commentary over the reasons why Chinese companies are heavily invested into North American shale assets.

However, in all this deal-making there is a nascent homegrown industry emerging – one that is set to grow as the shale gale takes hold of China.

China is thought to have more shale gas reserves than the US and this has created a huge market for related equipment manufacturing industry.

The US has an annual demand for fraccing equipment of about 800 units, and if China is to unleash a similar revolution, its demand will skyrocket.

About 200 units of fraccing equipment were bought last year, twice the number from the year before.

It is estimated China’s shale gas development will boost the growth of equipment manufacturing industry, which has a market value of about $US477 million this year. The sector had a 33% increase over last year.

Sinopec’s subsidiary, SJ Petroleum Machinery Co, is likely to invest 1.1 billion yuan on research for shale gas exploration equipment during the 12th Five Year Plan.

It already has sold 20 fracturing equipment units, with four more units scheduled for delivery.

Honghua Group, China’s biggest oil drilling equipment exporter is looking to expand tie up with its US partner Baker Hughes and acquire a shale gas asset in China.

It partnered with Baker Hughes last December to study shale gas prospects, provide oilfield services and do research in China. It also teamed up with the Shenhua Group to jointly explore for shale gas at the blocks won by the energy major.

Going by its latest earnings, Honghua’s prospects appear bright. Its full year profit was up 80% to about $US87 million.

The shares have done well too. Its Hong Kong-listed shares have more than tripled in the past year compared with a 6.6% gain in the Hang Seng Index.

The one company that has trumped all is Yantai Jereh Oilfield Services Group, a private oil and gas services company.

It owns about half the domestic shale gas equipment market share and recently catapulted its president Wang Kunxiao into the billionaire league.

The company Wang founded with fellow billionaire Sun Weijie has gone up by more than 60% this year alone and grew a whopping 93.18% in the previous year.

Wang’s 18% stake makes him the company’s second-largest shareholder, after Sun, the company’s chairman, who also debuted into Forbes’ 2013 World Billionaires list this year.

By all estimates, Yantai is considered a relatively small player with a revenue turnover of about $US368 million.

However, with shares bullish on future expectations, Yantai and other smaller players are in for shale windfall.