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In recent years, the supply-demand imbalance of oil and natural gas in China has become increasingly prominent. China’s crude oil import volume has surged, with external dependency exceeding 45%. Against the current global geopolitical and economic backdrop, excessive reliance on overseas petroleum resources has posed severe challenges to China’s oil security and endangered the stable development of the national economy. Hydraulic fracturing is a core technology for oil & gas reservoir stimulation. It involves injecting fluid into subsurface formations at pressures exceeding the rock breakdown pressure to create conductive fractures surrounding wellbores. To keep induced fractures propped open for smooth hydrocarbon flow after fracturing, the placement of granular ceramic proppant serves as an indispensable technical solution.

Shanxi Fusen Energy Technology Co., Ltd. is a joint-stock enterprise integrating R&D, production, sales and after-market service of ceramic fracturing proppants. Since its foundation, the company has adhered to an innovation-driven development strategy. Leveraging abundant local raw material resources, Fusen keeps optimizing production processes, upgrading manufacturing equipment and deploying state-of-the-art full-set testing instruments in the industry. Our mid/low-density & high-strength proppants covering specifications of 20/40, 30/50, 40/70 mesh fully satisfy diversified client requirements and are widely applied in conventional & unconventional shale gas special fracturing operations both domestically and globally.

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Founded in 2012 with registered capital of RMB 50 million, the company covers a land area of 140,000 sq.m., with designed annual capacity of 300,000 tons and total investment of RMB 310 million; its current actual annual output reaches 100,000 tons. Fusen has successively obtained authoritative certifications including API QMS, ISO9001 Quality Management System, OHSAS18000 Occupational Health & Safety Management System and ISO14001 Environmental Management System.

The enterprise owns three core competitive edges in resource deployment, technological R&D and sustainable development. First, to hedge industrial raw material shortage risks, Fusen has established dedicated raw material supply and formulation R&D base in Yima bauxite mining base, Henan Province via equity joint venture cooperation. Second, proprietary production technologies: integrating mature domestic & international advanced techniques, the production adopts advanced wet grinding for ceramic raw material proportioning and self-owned natural gas-fired auto-combustion regulation technology for calcination, which greatly elevates product quality, cuts manufacturing cost and strengthens core product competitiveness. Third, product development is positioned as the core driver for market expansion. Breakthrough progress has been achieved in ultra-low density proppant development; long-term school-enterprise R&D cooperation has been built with core expert teams from Inorganic Non-metallic Materials and Analytical Chemistry disciplines of Shaanxi University of Science and Technology, yielding fruitful proprietary technical outcomes.

Equipped with an in-house independent R&D center accredited as Shanxi Provincial-level Technical Center in 2017, the company is capable of custom-developing tailor-made ceramic proppant grades for varied customer demands. Up to now, four utility model and invention patents have been granted. In 2012, two dry-process production lines with designed annual output of 60,000 tons each were completed, using bauxite as primary feedstock. Restricted by multiple objective factors, the lines only realized annual output of 50,000 tons under full-load operation with slow capacity release and unsatisfactory economic returns. Fusen adjusted its development strategy in 2017 by focusing intensively on product R&D and process optimization to unlock technical dividends. In 2018, RMB 58 million was invested to renovate original dry-process lines into full wet-process production: crushed raw materials (particle size ≤3mm) are batched per customized formulas, followed by ball milling, sieving, ageing, spray granulation and powder processing before pelletization. Under high-temperature calcination, raw materials undergo physical & chemical structural rearrangement to form mullite-phase finished ceramic proppants. The technical upgrade lifted annual actual capacity from 50,000 tons to 100,000 tons alongside noticeable quality improvement. Meanwhile, the company optimized product mix by focusing on cost-effective low-density high-strength proppants as flagship products. Low-cost coal gangue, fly ash and bauxite tailings partially replace high-priced raw bauxite to slash overall production cost of petroleum fracturing proppants drastically.

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Abiding by the corporate tenet of "Quality Priority, Reputation First, Sincere Service, Customer Centricity" and enterprise spirit of "Perseverance, Integrity, Innovation, Transcendence", Fusen sticks to the development guideline of "Survive by Quality, Expand by Reputation". Since 2012, compliant with four certified management systems including API and ISO9001, the firm has realized safe harmless manufacturing, clean production and near-zero pollutant discharge. In terms of quality control, seven full-chain inspection & monitoring checkpoints have been formulated based on ceramic production characteristics: 1. incoming bauxite ore composition analysis; 2. batch laboratory testing of ingredient proportion; 3. composite inspection of raw & auxiliary materials; 4. periodic quantitative testing of semi-finished product indicators; 5. hourly spot pre-inspection at calciner outlet; 6. finished product screening, packaging and warehousing inspection; 7. random batch sampling before delivery. Full-process systematic monitoring enables timely process optimization at source to minimize defective rate, precisely grade finished goods and guarantee qualified delivery. The qualification rate of our “Xinhongsen” branded proppants maintains 100% upon factory release, winning consistent favorable feedback from major clients including CNPC and Sinopec. To better serve global partners and expand overseas footprint, Fusen has set up an overseas office in Houston, USA.

Thanks to persistent efforts, the company has gained numerous industry honors: designated as Shanxi Provincial Enterprise of Abiding Contracts & Keeping Credit in 2012; acquired CNPC product qualification certification and Grade B authorized supplier qualification in Dec 2013; shortlisted for Sinopec tender and secured supply award for one bid section in Feb 2014; awarded four tender lots in Sinopec procurement bidding in Jul 2015 and another four lots in Jul 2016; obtained Class I qualified supplier certification of CNPC in Dec 2016; got product approval certificate from PetroChina Company Limited in Aug 2017; granted AAA Corporate Credit Rating by China Academy of International Trade and Economic Cooperation, Ministry of Commerce in Oct 2017 and Grade A Credit Report issued by China Commercial Credit Center in Jun 2018.

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Fusen established a dedicated sales subsidiary in Houston, USA in 2015 and has participated in multiple international petroleum exhibitions. The enterprise will further deepen domestic market penetration while accelerating global business layout.

Driven by sustained national economic growth and rising household car ownership, domestic gasoline consumption keeps climbing and fuels robust demand for crude oil. Even amid economic downturns, oil & gas operators maintain continuous field operations, thus sustaining prosperous development of ceramic fracturing proppant sector. China’s annual domestic market demand ranges from 4.5 million tons to 5.5 million tons with an average annual growth rate of 15%~20%.

Major oil-producing countries overseas barely produce ceramic proppants domestically yet retain massive consumption, resulting in over 80% of their proppant demand reliant on import. Domestic Chinese ceramic proppants are mainly exported to the US, Russia, South Korea, South Africa, Middle East and other North American regions. Statistical data shows five top global oil service companies (Baker Hughes, Halliburton, Schlumberger, Weatherford and Nabors Industries) consumed a total of 12.6 million tons of fracturing proppants in 2015, among which ceramic proppants accounted for over 40%. Despite overall consumption dip in 2016 due to market volatility, the market bounced back upward from H2 2017 with widespread product shortage across the industry.

Benefiting from Shanxi’s geographically concentrated coal and bauxite mineral resources, Fusen enhances independent innovation capacity via in-house R&D, university-industry cooperation and international technical collaboration, focusing on proprietary core technology, intellectual property and eco-friendly production. The company prioritizes developing high-tech, high-value-added and high-competitiveness proppant products, utilizing abundant local solid waste resources including coal gangue, fly ash and bauxite tailings for stable raw material supply. The circular economy model converts industrial solid wastes into economic benefits with prominent cost advantage, eco-friendly production and promising market prospect. With superior product performance and outstanding cost competitiveness, Fusen’s products can fill domestic proppant supply gap, substitute expensive imported goods and earn sizable foreign exchange via export, empowering the enterprise to seize favorable position and secure initiative amid fierce global market competition.