06 April 2011 19:14 [Source: ICIS news]
By Nigel Davis
LONDON (ICIS)--“The international shale gas resource is vast,” the US Energy Information Administration (EIA) said on Tuesday.
True, the focus currently is on the US and Canada and the game-changing nature of newly-exploited shale gas deposits. But shale gas resources identified by a study commissioned by the agency increases the volume of total world technically recoverable gas by 40%.
And the report, from Advanced Resources International, does not include the potential of Russia and countries in the Middle East.
The EIA has looked at where shale gas development is likely to prove attractive so the latter two regions have been excluded, as they were deemed to have sufficient conventional sources of gas to be going on with. But if you live in France or Poland, South Africa, Australia, China or Argentina, hold on to your hat.
“The development of shale gas plays has become a ‘game changer’ for the US natural gas market,” the EIA says. So it does not take a great leap of the imagination to suspect that the exploitation of shale gas resources on a much wider scale will have a profound impact on energy markets globally.
The numbers are staggering. Exploitation of Barnett Shale deposits in north-central Texas did not really take off until the 1990s.
By 2005, the deposit was producing half a trillion cubic feet (14bn cubic metres) of natural gas. Deposits in the Haynesville, Marcellus, Woodford, Eagle Ford and other shale formations are being pursued such that shale gas production at the end of 2009 accounted for 21% of the US natural gas total.
Technically recoverable US shale gas resources are estimated now at 862 trillion cubic feet, the EIA says, or 34% of a 2,543 trillion cubic feet total.
Shale gas production is likely to account for 46% of US natural gas production by 2035, it suggests.
The latest global study is really only a first look at the global potential, and the estimates are likely to change over time. But in 32 countries, 5,760 trillion cubic feet of technically recoverable shale gas has been indentified.
World proven natural gas reserves on 1 January 2010 were estimated at 6,609 trillion cubic feet with technically recoverable resources put at 16,000 cubic feet, largely excluding shale gas, the agency says.
It adds that two country groupings are emerging where shale gas development might appear most attractive. “The first group consists of countries that are currently highly dependent upon natural gas imports, have at least some gas production infrastructure, and their estimated shale gas resources are substantial relative to their current gas consumption,” it says.
So for nations such as France, Poland, Turkey, Ukraine, South Africa, Morocco, and Chile, the exploitation of shale gas could “significantly alter their gas balance”.
The role shale gas plays in the already well developed natural gas infrastructure in countries with more than 200 trillion cubic feet of shale gas deposits is less clear, as one resource is pitched against another. Yet countries such as the US, Canada, Mexico, China, Australia, Libya, Algeria, Argentina and Brazil, have almost an embarrassment of (gas) riches.
Gas for power and gas for liquids projects will be built on the back of such reserves. And new opportunities for chemicals production will emerge.
Just this week, US-headquartered Westlake Chemical said it would lift its US cracking capacity by 10% adding up to 109,000 tonnes/year of ethane capability, and that it would convert one of its crackers from propane to ethane feed.
Other companies will follow suit as they seek to take capitalise on the availability of cost-advantaged feedstock. US-based Chevron Phillips Chemical has already said it is studying plans for a world-scale grassroots ethylene cracker in the US to take advantage of abundant supplies of shale gas.
The air of opportunity that surrounds shale gas in the US has yet to take hold elsewhere, and there are numerous reasons for that. But access to important shale gas deposits are being snapped up fast. It is only a matter of time before exploitation begins.
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