InterviewBASF sees no Europe shale gas production for 10 years

12 July 2012 19:00  [Source: ICIS news]

LONDON (ICIS)--BASF’s Wintershall oil and gas business does not expect that there will be any substantial shale gas production in Europe within the coming 10 years, an official said on Thursday.

In contrast with the US, shale gas development in Europe is only at its very beginning, Wintershall spokesman Stefan Leunig told ICIS in an interview.

“Before you can have real gas production from a field, that takes up to 10 years,” Leunig said.

He pointed to Poland, where contrary to earlier expectations, exploratory shale gas drilling turned out to be disappointing and US major ExxonMobil recently ended shale gas exploration in that country.

“We really cannot compare what is happening in Europe with the US,” Leunig added with reference to the US shale gas boom and plans for new chemical crackers in that country.

Wintershall, for its part, will be conducting preliminary geological research into Germany’s shale gas potential to determine how big the resources are and to assess if they can be exploited commercially and without environmental risks, Leunig said

The company’s research will not involve the controversial hydraulic fracturing (fracking) technology, he said.

However, Wintershall will employ fracking at a tight gas field in Lower Saxony, but tight gas fracking is relatively unproblematic, compared with shale gas fracking where large amounts of water and chemical additives are required, Leunig said.

Wintershall is experienced in tight gas fracking and has been using the technology without problems for more than 30 years in Germany, Russia, Argentina and elsewhere, he added.

Wintershall’s German tight gas field near Barnstorf, northwest of Hanover, has an estimated 40bn cubic metres of reserves, with recoverable reserves of around 10bn cubic metres – equivalent to about 10% of Germany’s annual gas consumption.

“This is relatively big, for a German field, given that we don't have much natural gas,” Leunig said. First commercial production could begin as early as 2015, he added.

Winterhall’s gas production in Germany is not directly tied in with BASF’s chemical production in the country, Leunig said. Wintershall produces the gas and sells it straight from drilling site, mostly for energy generation, he said.

“But of course, as a large consumer of gas, BASF is always looking at gas supplies [for its chemical production] – especially in the US, where gas is relatively cheap,” he said. In addition, BASF supplies chemical additives and fluids to the gas industry, he said.

Leunig added that Wintershall is also looking at shale gas exploration in Argentina. Argentina has a big potential for non-conventional gas, he said.

Asked about the Repsol expropriation in Argentina earlier this year, Leunig said that Wintershall does not fear that its business there may be expropriated.

“We see the Repsol situation as a unique case, but of course we are looking closely at what is happing in Argentina,” he said.

By: Stefan Baumgarten
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