China's growing economy is producing an insatiable energy demand that the nation is scrambling to fill. The world's most populace nation (and world's second largest economy) recently signed a 30-year, $400 billion deal with Russia to supply it with natural gas, but China isn't a gas-poor nation. According to the Energy Information Administration China is sitting on 1,115 trillion cubic feet of shale gas, 68% more than the US.

Until now several factors have stymied production of these enormous reserves, mainly a lack of three things: technology, infrastructure, and water.

However, China's government is now ready to get serious about increasing its domestic gas production and has set a goal of 6.5 billion cubic meters of production in 2015 and 60 billion to 100 billion cubic meters by 2020 (US production in 2013 was 272 billion cubic meters).

To achieve this goal China Petroleum and Chemical Company, aka Sinopec, is partnering with Total in order to drill its Fuling shale assets with the goal of hitting 10 billion cubic meters of gas production by 2017.

Sinopec recently announced a $50 million joint venture with the deeply troubled oil services company Weatherford International (NYSE:WFT), in an effort to gain technological expertise that could help them unlock their rich gas reserves.

In a previous article on Argentina's coming shale gas boom, I explained why the best way to invest in foreign shale resources was through oil services companies such as Schlumberger (NYSE:SLB) and Baker Hughes. In this case as well I would advise investors to choose oil service companies as the best way to play China's gas boom but avoid Weatherford International and instead go with Schlumberger or Halliburton (NYSE:HAL).

The reasons to choose Schlumberger or Halliburton over Weatherford is one of scale and technological superiority. The fact is that, despite its recent joint venture with Sinopec, Weatherford is simply outclassed by its rivals when it comes to being established in China.

For example, Schlumberger opened the China Petroleum institute in 2012 and a reservoir lab in Chengdu in 2013. Schlumberger also has a joint venture with Chinese utility Huadian and purchased a 20.1% stake in a Chinese oil services company, Anton Oilfield Services Group, for $80 million. Meanwhile Halliburton, who has been working in China on conventional drilling for 30 years and shale drilling since 2011, is in a strategic relationship with China's SBT Energy.

Besides existing relationships, investors must consider technological superiority when choosing oil service companies. This is especially important because in the last decade oil companies have increased E&P (exploration and production) budgets by 400%, up to $650 billion in 2013, with just a 15% increase in oil production to show for it.

This is causing oil companies to search for the most cost effective methods of drilling and this is especially true in China where difficult geology means it costs two to five times more per well to drill. To give you an idea of how difficult Chinese shale drilling can be, some wells cost $12 million to frack and require 13 million gallons of water.

This is where technological innovation and vertical integration come into play. Companies such as Schlumberger and Halliburton, due to their enormous size, are able to acquire and assimilate competitors and their technology. This allows them to create a one-stop shop where foreign oil giants like Petrochina and Sinopec can come to for all their drilling needs.

Schlumberger in particular is the master of vertical integration (and my favorite oil service company) with a penchant for deals both big ($11 billion acquisition of Smith International) and small (such as Nova Drill).

With increased patent filings over the last six years and new products such as the powerdrive (improved steering of rotary drill bits during horizontal drilling), I believe Schlumberger is best poised to take advantage of China's coming gas boom.

Foolish bottom line
Though some investors may look at Weatherford International's recent joint venture with Sinopec as a major win, I view the $50 million deal as too little too late to save the investment thesis of a very troubled oil services company. Rather, I would advise investing in Halliburton or Schlumberger as the best means of partaking in the rich bounty of the world's largest shale gas reserves. Both companies (but Schlumberger most of all) have the long-standing relationships, financial resources, and technological prowess to help Chinese oil companies achieve their ambitious goals. Long-term investors seeking to grow rich from the largest gas boom in history should look to these companies as the best way to ride the gravy boat all the way to the bank -- atop an ocean of natural gas.

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Adam Galas has no position in any stocks mentioned. The Motley Fool recommends Halliburton. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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