For GE the agreement with HongHua - which is also the world's second largest drill rig supplier - shows its plan to collaborate with local companies in China's oil and gas sector has paid off.

"Our agreement with HongHua strengthens our position as a leading gas engine supplier for drill rigs in Asia as GE continues to expand its role in the global unconventional gas sector in China and other key markets around the world," GE distributed power vice-president and chief commercial officer Darryl Wilson said.

The Waukesha gas engines will be fuelled by onsite field gas or with commercial grade gas to generate 2.8-3 megawatts of onsite power.

By using this field gas, drill rig operators can reduce their fuel transportation costs and optimise the availability of rigs.

The Waukesha gas-powered engines can be run by almost any gaseous fuel ranging from 950 to 2600 British thermal units.

It includes everything from hot field gases, commercial grade gas, LNG, compressed natural gas and up to HD-5 propane.

Typical drill rigs use three diesel engines for power.

GE's Waukesha gas engines can help drill rig operators get significant improvements in operating efficiency and lower greenhouse gas emissions by switching from conventional diesel to cleaner-burning natural gas.

For example, using gas-fired engines at gas extraction sites can save drillers as much as 80% in fuel costs compared to diesel, based on a calculation of gas at $US3 ($A3.20) per thousand cubic feet and diesel at about $70c a litre.

Nitrous oxide emissions can be reduced by as much as 95% when the rig is powered by GE's Waukesha VHP 7044GSI or a GE Jenbacher J320 gas engine running on 100% natural gas compared to a typical diesel engine.