Long-Term Growth in Shale Gas Production Expected to Play Role in Shaping Demand for Middle East LNG

Investment in the development of shale gas, a natural gas recovered through a careful procedure involving horizontal drilling and hydraulic fracturing in the US and Europe could present Middle East markets with a reduction in demand according to Euro-Petroleum Consultants’ (EPC) President, Colin Chapman. Euro-Petroleum Consultants (EPC), a leading independent supplier of experienced consulting advice for the downstream oil, gas and petrochemicals industries, offered fresh insights into the future of the global gas market and an analysis of the growing role of shale gas production in Europe, North America and Asia.

“Over the last several years, technologies for extracting unconventional natural gas from shale formations have been implemented with greater precisions resulting in lower costs,” said Colin Chapman, President of EPC. “So much so that costs for these types of gas projects have been in some cases lower than those of more conventional projects”.

In Europe, shale and other unconventional gas resources have been identified in France, Germany, Hungary, Italy, Netherlands, Poland, Romania, Spain, Sweden, Switzerland and the United Kingdom. As a result, LNG-rich nations such as Qatar and UAE have already begun reevaluating options of exporting gas and some of its gas-strapped neighbouring countries.

“Looking at the regional LNG market, the fact we are currently in the middle of a global economic downturn coupled with the emergence of the unconventional gas supply and new LNG capacity coming on-stream, it is likely that there will be a reduction in project activity in the LNG sector over the coming year”, Chapman added.

North America has been the leader in developing and producing shale gas and the great economic success of the Barnett Shale field in Texas has spurred the search for other sources of shale gas across both the United States and Canada. Within the Middle East region, shale reserves exist in Jordan and Syria, but the extent to which the deposits will have on the overall gas balance will largely depend on the speed at which exploration efforts advance.

The processing of Shale gas has turned around the decline of U.S. gas reserves and significantly changed the gas supply outlook for the United States. According to recent reports, estimated U.S. reserves of natural gas were 35% higher than those estimated only two years ago.

Chapman was speaking ahead of EPC’s ME-TECH 2011 Conference & Exhibition, which is taking place from 24th – 26th January at the Madinat Jumeirah in Dubai, UAE. The conference aims to discuss latest technology developments in the downstream industry, including gas processing, oil refining, residue upgrading and petrochemicals. High profile industry representatives such as Ibrahim Al-Ansari, General Manager, Dolphin Energy and Dr Abdulwahab Al-Sadoun, Secretary General, Gulf Petrochemicals and Chemicals Association, will be speaking at the event on global and regional trends.

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Source: EPC, November 29, 2010;