Asian Based Funds Acquire Key Shale Service Provider

The betting that Asian shale gas development will follow the lead of the U.S., state owned Singapore's Temasek Holdings Pte. and private equity fund RRJ Capital, have agreed to take a 70% stake in Frac Tech Holdings LCC.

Frac Tech is a major provider of pressure-pumping equipment for the U.S. oil-and-gas industry and provides extraction services for wells in shale and other unconventional formations.

The buyers undoubtedly hope to leverage their strong Asian contacts to assist in business development efforts on behalf of their investment.  Frac Tech reportedly is likely to launch operations in China soon through a joint venture with a major Chinese oil firm.

The U.S. Energy Information Administration issued a report earlier this month estimated China's recoverable shale-gas reserves could exceed those of the U.S. by 50%.

U.S. natural-gas company Chesapeake Energy Corp., is also increasing its holding in Frac Tech to 30% from approximately 26%.