Shale Natural Gas rule international energy market

Shale Natural Gas to rule international energy market

1:40 PM, 8th April 2011
Shale Natural Gas to rule international energy market
Shannon Shuflat, Analyst, SBI Energy.

Rising energy concerns will see shale gas, natural gas produced from shale formations, having the potential to dramatically impact global energy markets. At present, driven by US investment, Shale Natural Gas has becomes the focus of international energy market. An earlier start and aggressive action to date indicate China, Poland and India will likely emerge as the first producers of shale gas outside of North America.

 

CHINA TOWN, SINGAPORE: Shale gas, natural gas produced from shale formations, has the potential to dramatically impact global energy markets, according to ‘Global Shale Gas Technologies and Markets’ report by industrial research firm SBI Energy.

 

According to the report, the response to these factors has been an astounding twelve-fold increase in the recorded global production of shale gas from 2000 to 2010. SBI Energy estimates that global shale gas production grew at a compound annual average rate (CAGR) of nearly 50 per cent per year from 1,002 billion cubic feet in 2006 to 5,042 billion cubic feet in 2010.

 

“Declining production from depleting conventional gas resources in many parts of the world, combined with rising global demand for energy and natural gas has caused dramatic increases in the price of crude oil and natural gas over the better part of the decade. This has both driven demand for shale gas and improved the economic viability of shale gas developments,” said Shannon Shuflat, Analyst, SBI Energy.

 

Presently, the success of shale gas production in North America and particularly in the United States, has triggered the exploration of shale gas resources around the world. Shale gas exploration is occurring in China, India, Poland, Germany, Spain, France, the United Kingdom, the Netherlands, Australia, Austria, Sweden, Switzerland, Italy, Hungary, Romania, Ukraine, and Argentina, among other nations seeking to lower-carbon fuels while also ensuring energy security and economic development. An earlier start and aggressive action to date indicate China, Poland and India will likely emerge as the first producers of shale gas outside of North America.

 

Recently, Chevron Phillips Chemical Company announced advancing a feasibility study to construct a world-scale ethane cracker and ethylene derivatives at one of its existing facilities in the US Gulf Coast region. The new facility would utilize the advantaged feed sources expected from development of shale gas reserves.

 

Added to this, Stephen Pryor, President, ExxonMobil Chemical Company predicted that natural gas will replace coal as the world’s second-largest fuel source, mostly through shale gas production, by 2030. 

 

“The confluence of growing natural gas demand and breakthrough technological advancements has made investments in shale plays attractive in recent years. Advancements in horizontal drilling and hydraulic fracturing technologies have enabled the achievement of high rates of gas production from deep, low permeability shale formations. These breakthroughs have facilitated access to some of the largest undeveloped gas resources in the world,” said Akash Shah, Analyst, SBI Energy.

 

Despite the severe global economic recession over the past two years, growth in shale gas production volume has continued unabated. However, the wellhead production value of global shale gas has not kept pace with production volume growth because natural gas prices have declined steeply since the recession hit in the latter half of 2008. Lower realized wellhead prices notwithstanding, the global value of shale gas production grew by nearly 35 per cent per year from $ 6.4 billion in 2006 to over $21 billion in 2010. The global value of shale gas production is expected to grow by 12 per cent annually to ultimately exceed $ 37 billion in 2015 and further by 9 per cent annually to more than $ 56 billion in 2020.

(C) WOC News

 

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