China’s shale gas production has surged this year as the sector develops from a low base. Although that is good news for certain steel pipe producers, it comes amid a broader decline in oil and gas investment which is squeezing the sector, Kallanish notes.

The first seven months of 2016 saw China produce 5.01 billion cubic metres of shale gas, up from just around 600m cu metres a year earlier, notes sister publication Kallanish Energy. Shale was core to a doubling in total unconventional gas output to 9.64bn cu meters over the same period.

With China’s energy resource development dominated by a handful of state-owned enterprises, it is only the pipemakers with the right connections that will really benefit from this rapid development. Nor is the shale industry on its own enough to spark an overall increase in pipe demand. China’s total investment in petroleum and gas extraction was still down -28.1% year-on-year over January-July at CNY 114.4 billion ($17.12 billion).

The shale gas boom is nevertheless welcome and could still have some way to go. China has unproved recoverable reserves of around 1,115.2 trillion cubic feet (31.58 trillion cu meters), and it is steadily bringing in international majors to develop them. BP signed a contract last week with China National Petroleum Corporation (CNPC) to explore a 1,000 square kilometre area in Sichuan and share future production.