China International Marine Containers (CIMC) Raffles, a subsidy of CIMC, has signed a strategic cooperation agreement with State-owned CNPC Offshore Engineering Co (CPOE) to jointly mine methane hydrates, also known as flammable ice, in the South China Sea, according to a statement on CIMC's website on Wednesday.
The deal was signed in Yantai, East China's Shandong Province. It will allow both sides to promote the global deep-water drilling market, and expand their domestic and overseas offshore engineering businesses.
The companies can pool their advantages, such as CPOE's experience in general contracting management and CIMC Raffles' advantage in equipment building and operation, complement each other and share resources.
CIMC Raffles said at the signing ceremony that it hoped the two companies could establish a long-term communication mechanism, news website thepaper.cn reported.
Since 2013, CIMC Raffles has maintained two types of CNPC drilling platforms - CNPC 61 and CNPC 10. The company delivered the self-elevating drilling platform CNPC 15 in 2015.
In August 2016, the two companies signed a deep-sea drilling platform technical service agreement, providing a guarantee for the country's trial flammable ice project in the South China Sea.
Flammable ice, a frozen mixture of water and gas under high pressure, produces clean fuel that is considered a strategic substitute for fossil fuels and natural gases. It is considered key to China's energy security and energy structure optimization.
In May, China announced that it had for the first time extracted gas from flammable ice and converted it into natural gas in a single, continuous operation on a floating production platform in the Shenhu area of the South China Sea.
The collection of the frozen fuel was "a major breakthrough that could lead to a global energy revolution," said the report.