According to a research report issued by Tianfeng Securities, hydraulic fracturing is the main technical difference between shale gas and conventional natural gas development and production, so the biggest benefit is fracturing, according to Zhitong Financial APP. It is estimated that the market space of electric fracturing equipment for shale gas in China will be about 67.57 billion yuan in 2030.The market space is relatively broad; at present, China's fracturing equipment has been made in China.Jerry shares (002353.SZ) has occupied more than 50% of the national market share in the field of fracturing equipment, firmly occupies the leading position in the industry market share, and is difficult to be surpassed in the short term.

The main points of ▍ Skywind Securities are as follows:

The process of shale gas exploration and development in China is relatively rapid, and commercial development has been realized at present.

Compared with conventional natural gas, shale gas development has many advantages. China's shale gas production has increased from 3.41% in 15 years to 11.1% in 21 years, entering a golden period of rapid development. with the rising proportion of natural gas in the energy consumption structure and the success of commercial development of shale gas in southern Sichuan, shale gas is expected to become the most reliable type of energy replacement in China in the future.

The United States takes the lead in completing the "shale revolution" and is the main body of global shale gas development. The experience of shale gas exploration and development in China is relatively short, which is only about 1x10 of that in the United States, but it is developing rapidly. It took China only six years to achieve an annual output of 10 billion cubic meters, and then it took two years to achieve a historic leap of 20 billion cubic meters in a shallow depth of 3500m, and a breakthrough and discovery at a depth of 3500-4000m, creating a miracle in the history of China's natural gas development.

China ranks first in technological reserves in the world and is the third country to realize commercial exploitation of shale gas.

Tracing back to the successful history of "shale revolution" in North America, "technology + policy" is expected to drive the development of shale gas in China.

Technological innovation provides impetus for the long-term development of shale gas: the "shale revolution" with "horizontal well drilling and completion + sectional fracturing" as the core technology has reversed the US natural gas import and export deficit and turned it into an exporting country, with an output of 807 billion cubic meters in 22 years. Its technical combination includes: 1) the prediction technology combination of "dessert area" accurately and quickly locates oil and gas "desserts"; 2) the combination of "one-trip drilling" technology to improve the operation efficiency of horizontal wells. 3) the combination of "long horizontal well + super fracturing" technology can improve the productivity of single well. Compared with the United States, China still has shortcomings in technological innovation.

Adhering to technological innovation and technological combination is the key to the success of the American oil and gas revolution, so it is expected that the technological combination will become a strong starting point for increasing production, reducing cost and increasing efficiency of shale gas in China.

The support of diversified industrial policies has become an important driving force for the development of shale gas: the US government promotes the rapid development of the shale gas industry through tax credits and fiscal policies, and industrial support policies provide guarantee for the development of shale gas benefits in the United States. China's financial subsidies for shale gas are also strong, with subsidies of 0.4 yuan per cubic meter in 12-15 years, 0.3 yuan per cubic meter in 16-18 years and 0.2 yuan per cubic meter in 19-20 years.

There is considerable potential for shale gas exploitation in China, and fracturing may be the most beneficial link.

Three types of mechanism-rich shales are widely developed in continental sedimentary basins in China. The four major producing areas in China are Fuling shale gas field, southern Sichuan shale gas field, Wei (Yuan) Rong shale gas field and Changning shale gas demonstration area. Marine shale gas with Sichuan Basin and its adjacent areas as the main force of exploration and development is the main body of shale gas production growth in the future, and is expected to break through the current single economic shale gas formation in China.

The prospect of shale gas development in China is considerable. According to Zou Cai's "Progress, potential and Prospect of Shale Gas Development in China", China's shale gas production is expected to reach 300 × 108m3 in 25 years and 350-400×108m3 in 30 years. Among them, the overall development of shale gas in Sichuan is relatively rapid, the output of shale gas has increased from 34.67 × 108m3 in 16 years to 143.4 × 108m3, and the proportion of shale gas in natural gas production has increased from 11.68% to 27.46%.

The main enterprises of shale gas exploration and development in China are Petrochina Company Limited and China Petroleum & Chemical Corp. In 22 years, there are three shale gas development companies jointly owned by Petrochina Company Limited, China Petroleum & Chemical Corp and Sichuan Province, and the area of the jointly developed blocks accounts for about 80% of the area of used shale gas mining areas.

The main technical difference between shale gas and conventional natural gas development and production lies in hydraulic fracturing, so the biggest benefit is fracturing. It is estimated that the market space of electric fracturing equipment for shale gas in China will be about 67.57 billion yuan in 2030, and the market space is relatively broad. At present, China's fracturing equipment has been localized, and Jerry shares have occupied more than 50% of the national market share in the field of fracturing equipment. It firmly occupies the leading position in the market share of the industry, and it is difficult to be surpassed in the short term.

Risk Tips:

The risk of geopolitical fluctuations; the risk that the progress of shale oil and gas exploration and development in China is not as expected; the risk that the performance growth of related oil service companies is not as expected.