Shale gas | markets
TOP 10 WORLD REGIONS BY ESTIMATED SHALE GAS TECHNICALLY RECOVERABLE RESOURCES AND NATURAL GAS IMPORTS/ (EXPORTS) PERCENTAGES
1,400 1,200 1,000 800 600 400 200 0
-200 -400 -600 -800 -1,000 -1,200 -1,400
China Source: EIA
US Argentina Mexico South Australia Canada Libya Algeria Brazil Africa
Russia’s Gazprom may deny access to its under-used gas pipeline crossing Poland from Russia to Germany. At present the main investment in new European
pipeline construction is designed to transmit natural gas across the continent, and it is this that offers the prospect of at least 1,500 km of new pipeline construc- tion over the next decade. Sverrisson is sceptical over European shale gas expansion. “All I can say is that with Europe and Germany in particular struggling to build the necessary infrastructure to cope with the massive expansion of renewables, I would be surprised if there was a sudden roll-out of pipelines to cope with any potential growth in shale gas production,” he says. Bredero Shaw’s Brum reinforces Sverrisson’s opinion, saying that the company has not observed any change in Europe due to shale gas interest. Even in Poland, where development of shale gas is seen as a top political and economic priority that could reduce its energy dependency on its neighbour Russia, progress has been slow. “Not one company has announced they have gas in commercially viable quantities…Gas production will be developing over a long period of time and without much infl uence on imports from Russia,” says Kosc.
The outlook for shale
For both shale gas production and the global pipeline industry, the world outlook is a mixed bag. In the US, the industry is facing problems stemming largely from its spectacular and rapid success. This has resulted in a slump in domestic gas prices which, while good for customers and consumers, has proved to be a problem for explorers, extractors and investors.
The US has enjoyed signifi cant investment to
upgrade the pipeline network, to expand domestic and transit infrastructure, and to overcome congestion issues and improve market access. While already
SHALE GAS OFFSETS IN US Source: EIA November 2012 | PIPELINE COATING 17
announced current pipeline plans may be slowed during this price slump, investment will recover. Investment could be further accelerated by a decision from the US government to allow exports of shale gas. For Canada, when shale gas does come on line it is
unlikely any surplus will be exported to the US. Instead, new LNG export corridors will be developed to serve export markets in Asia and Europe. As for Mexico, the future seems bright; shale gas solves the country’s domestic power problems and creates a new export opportunity to markets in the southern US, such as California. In Australia, shale gas development will depend
largely upon demand from Asian markets, establishing of long term contracts, and foreign investment in equipment, technical skills and fi nancing.
About the author:
Nicholas Newman is an energy journalist and consult- ant with particular focus on investment, risk manage- ment, geopolitics and trading in the global offshore and onshore oil and gas industries.
200% 150% 100% 50% 0%
-50% -100% -150% -200%
Percentage
Trillion cubic feet
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