markets | Shale gas
Consumer Commission in 2009. Therefore, prospective shale gas exploitation can be expected to offer great opportunities for pipeline construction, installation and protective coatings in the future. Frits Doddema, who heads up the EVP/GM Seal For
Life Industries unit within the Berry Plastics Engineered Materials Division, sees Australia, together with the US, as sectors of strong potential for shale gas related investment. “We are very focused on developments in US and Australia, in particular. In these markets, shale gas is quickly becoming a subject of conversation and focus in our discussions with clients about their projects,” he says. There are hopes that the European Union will also
Above: Map showing the major shale gas production regions in the US (Source: EIA)
domestic shale gas industry. For Australia to replicate the US shale gas revolu- tion, many obstacles will have to be overcome. Chief amongst them is a reduction in the disparity between low domestic gas prices and more expensive world market prices. Already, as a result of energy policy reforms, Australian power companies have started to invest in replacing coal power stations with cleaner gas and this has already caused domestic gas prices to move upwards.
Pricing disparity is not the only challenge for the
country. New pipelines need to be constructed to collect, transmit and distribute gas, since many potential shale gas fields are some distance from Australia’s 75,000 km network of gas pipes serving major cities such as Sydney and Melbourne and the country’s export terminals. In addition, firm export-led sales agreements are required to ensure sufficient financing for the scale of investment required. Drilling costs also need to become more competitive with coal seam gas while the scarcity of water has to be solved before Australia can enjoy a take-off in shale gas. However, these logistical, technological and capital
issues can be resolved, and it is probable that Austral- ia’s shale gas sector will come on stream by the end of the decade. Some idea of what this will mean in terms of pipeline investment can be taken from comments Ferguson made to delegates at the Australian Pipeline Industry Association Convention in Brisbane last month. “A typical Australian CSG LNG export project requires around 550 km of major transmission pipeline, which in turn is supported by an additional 4000 km of feeder lines,” he said. Australia has invested some AUS$4bn in the
country’s gas transmission network since the 1990’s, according to reports by the Australian Competition and
16 PIPELINE COATING | November 2012
repeat the US shale gas success but, at present, shale gas is still at the research stage. “It has been talked about very large potential reserves, but getting these out of the ground will be no easy or speedy task,” says Richard Sverrisson, news editor at Montel. Europe already has an extensive network of gas pipelines within individual countries, as well as major transit pipelines. Already, there are some 35 separate pipeline systems linking member states with gas producers in the North Sea, Russia and North Africa and the continent has seen the recent completion of a number of major new pipelines, including the Nord- stream scheme. Unfortunately, there are a number of political, economic, environmental, technical and geological challenges that need to be overcome.
Polish enthusiasm Poland has considerable shale gas reserves and its government is highly enthusiastic about the potential opportunity that presents. However, environmental concerns and worries about water shortages mean the prospects for shale gas development in the rest of Europe remains patchy. Drilling moratoriums are already in place in France and the UK, for instance. In addition, shale gas in Europe occurs at deeper depths than in the US and in a more complex geology, necessitating downward revisions of reserves. As a consequence, Poland’s State Geological Institute’s estimates of its shale gas reserves are roughly ten times smaller than EIA estimates, according to Shale Gas Investment Guide editor Wojciech Kosc. Europe also has only around 100 portable onshore deep drilling rigs available, compared to many thousands in North America, and this lack of skilled exploration capacity is likely to hinder European efforts in the short to medium term. If commercial shale gas quantities can be retrieved
in Poland, gas could be readily transmitted via gas interconnectors to Austria’s Baumgarten Gas Hub for access to Southern Europe. However, shale gas exports to Germany might well require a new pipeline as
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