Jan 26

 

State-owned oil and gas company PGNIG will work with other state-owned energy producers PGE, Tauron and copper miner KGHM in shale gas exploration in Poland.

The company said it had signed three letters of intent to cooperate with the three domestic heavyweights.

The government said recently it wants state-owned companies to make a ‘strong’ contribution to developing domestic shale gas.

Shale gas could start production in 2014, according to the government.

Poland has the largest deposits in Europe estimated at 5.3 trillion cubic metres and enough to meet domestic gas needs for up to 200 years, according to some projections.

At present Poland relies for its energy supplies mainly from Russia and environmentally unfriendly but domestically mined coal.

The government is becoming increasingly interested in maximimising domestic benefits from shale gas production, hence PGNiG’s and the country’s main oil refiner PKN Orlen’s plans to ramp up cooperation with local players.

The move is important in that it indicates a shift towards greater interlinkage of domestic resources, and possibly away from a reliance on foreign majors.

PGNiG holds 15 such of about 100 shale gas exploration licenses, with global majors such as Chevron and Exxon Mobil also eager to get in on the act.

The three agreements are for exploration in the Wejherowo acreage in northern Poland.

Wejherowo is one of 15 concessions held by PGNiG and believed to be one of the largest, although exact figures have not been released, if they are known at all at this stage.

The three domestic power producers will reportedly be responsible for infrastructure works above ground.

The total investment will be somewhere between 400 million and 500 million zlotys, PGNiG said.

Tauron said it plans to build a gas-fired power plant and plans to work with PGNiG on a 600 megawatt plant at Stalowa Wola. It also plans to build an 800 megawatt plant with KGHM, both fired by shale gas.

Source: theNews.PL

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Jan 20

 

Oil giant Total has lodged an appeal against the withdrawal of its permit to drill exploratory wells for shale gas in the south of France.

The government withdrew drilling permissions in October after widescale summer protests about the environmental impact of the only known technique for exploiting shale gas, hydraulic fracturing.

Total Gas Shale Europe managing director Bruno Courme said at a press conference in Paris that Total “respects the law” however, he added, “our position is that the law does not justify the withdrawal of our permits”.

He was speaking after a meeting of oil company heads and Ecology Minister Nathalie Kosciusko-Morizet on shale gas entitled “The French ban: how to get out?”.

UMP MP François-Michel Gonnot sparked fears among environmentalists that the government was preparing to overturn the ban as he said: “I do not see why the debate cannot continue just because we voted a law based on circumstance. It’s not a taboo subject.”

Hundreds of thousands of people had campaigned against shale gas exploration and the use of hydraulic fracturing last summer and the government introduced an outright ban despite permits already having been issued. Oil firms were told to submit new applications that did not propose the use of now-banned technique.

Total’s application to drill the Montélimar prospect (which covers 4,327sq.km from Montélimar to Montpellier) said specifically that it would not use hydraulic fracturing but the government criticised it for not being “sufficiently explicit” in explaining alternative techniques.

Hydraulic fracturing is a technique where shale gas tightly bonded in deep rock structures is freed using underground explosions to fracture the rock.

Known as “fracking”, the technique has been criticised as millions of litres of chemical-laden water is used to force the gas up to the surface and there are fears this will contaminate aquifers and other underground water sources.

Environmental protesters also fear the impact of widescale drilling rigs and access roads being set up across the Ardèche, Drôme and Gard departments.

Shale gas has not yet been confirmed in the French sites but protesters say that if Total’s exploratory wells do strike gaz de schiste there will be immense pressure on the government to authorise “fracking” no matter the feared consequences.

Source: The Connextion

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Sep 01

 

Ukraine opened shale gas development to Western giants on Thursday, assigning its first exploration contract to the Anglo-Dutch firm Shell in a deal worth up to $800 million (555 million euros).

“In case of successful exploration work and the start of intense project development, Shell’s total investment under the agreement may come to $800 million,” the state-own Ukrgazvydobuvannya gas exploration company said.

Ukraine is widely believed to be one of Europe’s largest holders of the new energy resource with estimated reserves up to 1.5 trillion cubic metres, according to industry analysts.

But it lacks the technology to reach the deeply-buried rock that can be transformed into fuel in a difficult operation called fracking, and continues to rely heavily on gas imports from its eastern neighbour Russia.

The decision to award the contract to Shell comes amid a swell of foreign interest in Ukrainian shale, with such gas production already booming in the United States and slowly beginning to make its way into Europe.

Other Western majors as Chevron and ExxonMobil have also expressed an interest in Ukrainian shale projects, and the Anglo-Russian joint venture TNK-BP signed a preliminary agreement with the government in October.

The deal also coincides with a drive by Ukraine to reduce the price for the gas it buys from Russia, with the two sides now engaged in a new row that threatens to disrupt European supplies for the second time since 2009.

“The time will come when Ukraine will meet all of its own gas needs,” news agencies quoted Prime Minister Mykola Azarov saying after the signing ceremony.

“This is the first big joint activity agreement capable of quickly raising gas production in our country,” added Energy Minister Yuriy Boiko.

The agreement will see Shell dig up to 1,000 exploration wells in northeastern Ukraine, each of which will run up to six kilometres (3.7 miles) below ground.

With the rock buried so deeply and no technology available for reaching it, Ukraine has never officially studied how much shale it might actually have.

Neither Shell nor Ukraine has estimated how much gas may be hidden in the six blocks awarded to Shell near northeastern city of Kharkiv.

But the agreement could lead to the first successful development of shale in Ukraine, providing Shell with privileged status in a potentially huge market.

Shell launched its operations in Ukraine in August 2006 when its signed a broad agreement covering both oil and gas exploration.

The company has previously operated by holding 50-50 stakes in local joint operations ventures, while not getting rights to the fields themselves.

News reports said Thursday’s agreement will see Shell make the operating decision in the project, with more strategic moves decided jointly with the state-run company.

Source: AFP

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Jul 22

Warsaw – Poland hopes to benefit from prospective shale gas output and may pass laws similar to those that helped Norway build its sovereign wealth fund, Economy Minister Waldemar Pawlak said.

“In Norway oil and gas deposits allowed it to create funds that accumulate money for the future,” Pawlak told a news conference today. “We will also need this type of solution.”

Norway, a nation of 4.9 million people, generates money for its $570 billion sovereign wealth fund from taxes on oil and gas, ownership of petroleum fields and dividends from its 67 percent stake in Statoil ASA, the country’s largest energy company.

Poland has awarded 87 licenses to companies including Exxon Mobil Corp., Chevron Corp. and Talisman Energy Inc. to explore for gas trapped in shale rocks. The country’s recoverable reserves of shale gas may amount to 5.2 trillion cubic meters, enough to supply more than 300 years of domestic consumption, according to the U.S. Energy Information Administration. The companies have so far drilled fewer than 10 exploratory wells of the required 124, and they plan to conduct commercial tests later this year.

Pawlak said commercial output of shale gas should precede passage of any laws aimed at helping Poland reap greater benefits from the resource.

“Gas should start flowing before we prepare new regulations for commercial output,” he said.

Source: Bloomberg

Jul 22

Prime Minister Valdis Dombrovskis said that Latvia plans to diversify its energy sources by building a liquefied natural gas port in Riga and by exploring the development of shale gas resources.

Dombrovskis said he spoke about exploring for shale gas in Latvia with officials in on a recent trip to the U.S.

In February, Latvian Foreign Minister Girts Valdis Kristovskis said that geological indicators point out that shale gas is ”located under most of Latvia’s territory.”

‘The U.S. has information on shale gas deposits throughout the world.  If detailed geological probes are successful, we will be able to extract this gas from Latvia’s territory,” Kristovskis believes.

Latvia has been seeking to further cut the country’s dependence on Russia.

Source: Natural Gas for Europe

Jul 12

Warsaw, Poland - The rush for shale gas in Poland is attracting some of the world’s biggest energy companies, giving the country hopes of energy security and strengthening ties with the United States.

Recent finds in northern Poland appear to confirm what experts have suspected for years – that Poland has Europe’s largest reserves of shale gas.  The news promises to encourage what has become a feeding frenzy of major gas companies and Polish hopes of energy independence from Russia.

Shale gas is natural gas trapped in shale rock.  In April, a report by the U.S. Energy Information Administration said Poland could have the largest and most accessible shale gas reserves on the continent.  But up to now, no one could be sure Poland had any gas at all.

Recently-drilled wells indicate the gas is there, says Pawel Poprawa of the Polish Geological Institute.  But, he adds, it is still impossible to tell whether or not it will ever be extracted.

“A couple of these wells altogether seem to confirm the concept,” he said.  “Yes, we think there is gas in the formation.  However, we need to figure out if we are able to get it to the surface, and if we do, then it is a question of if it will be commercial.”

Poprawa says it will be several years before anyone knows exactly how much gas Poland has, and at least a decade before large-scale production can begin.  But in the mean time, exploration concessions have been granted to some of the biggest energy companies in the world.

“We have on our market real majors, the biggest companies globally,” he said.  “We have here Exxon, Chevron, ConocoPhillips, Total – this is kind of unique, really.  This place a couple of years ago was empty.  Now everybody from the world comes here to make their exploration.”

Many of these companies are American, which has sparked the interest of U.S. policy makers.  On his recent visit to Warsaw, U.S. President Barack Obama said the United States is eager to cooperate with Poland in producing shale gas.

“Shale gas is an important opportunity,” the president said.  “We believe that there is the capacity technologically to extract that gas in a way that is entirely safe, and what we want to do is to be able to share our expertise and technology with Poland in a fully transparent and accountable way.”

Agata Hinc, of the Warsaw-based research organization Demos Europa, explains that collaborating on shale gas could also lead to closer political ties between the United States and Poland.

“For American companies it means money,” she said. “But it also means stable international cooperation on important issues that will last longer than two months.”

But when it comes to energy, Poland’s main geopolitical concern lies to the east.  The country has long been dependent on gas from Russia, and Hinc says that for many Poles, independence from their former communist rulers is a major concern.

“Energy security has meant for a very long time, and for some still means, independence from Russian gas here in Poland,” she said.  “This is a very big political issue.  I would not say the younger generation thinks about it that much, but certainly the older generations and our policy makers want to ensure that we are totally independent from our big neighbor”

Shale gas has become controversial in recent years.  Environmentalists claim that during the process of hydraulic extraction – known as “fracking” – gas and other contaminants from the process can seep into the ground water, damaging the environment and posing a health risk.  In the United States, New York State has imposed a moratorium on fracking, and France has forbidden any new exploration.

Spokesman Jacek Winiarski of the Warsaw branch of Greenpeace says companies in Poland need to take the environmental impact into account.

“We know what are the American experiences with drilling and extracting shale gas,” he said.  “It causes water pollution, animal diseases, and other environmental pollution.  We perceive gas as a temporary transition fuel between coal and renewables, so we are not against gas, but gas extracted in a safe way.”

But Hinc explains Poland’s priorities tend to be different from those in the West, and that for now, environmental concerns are likely to take a back seat when faced with the prospect of energy independence.

“In the richest countries in Europe, green groups are very strong because people want to live in a clean environment, which is not the case in Poland, at least not yet,” she said.  “As for now, cheap electricity and energy security are the most important issues.”

Fracking may begin later this summer, and for now, the size of Poland’s shale gas reserves can only be guessed at.  But with 120 new wells planned for the coming years, it appears the eyes of the world will be on Poland for a long time.

 

Source: Voice of America

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Jun 16

SOFIA, June 15 (Reuters) – The Bulgarian government granted a five-year permit to U.S. energy firm Chevron on Wednesday to carry out shale gas exploration work at a potentially huge field in northeastern Bulgaria.

Last month, the Balkan country said Chevron had won a tender for the work at the 4,400-square-kilometre (1,087,264 acres) Novi Pazar field over Canada’s BNK Petroleum.

Economy and Energy Minister Traicho Traikov told reporters that Chevron will prepare a five-year working programme worth 50 million euros ($71.87 million).

The company will pay 30 million euros to the state to start exploring for shale gas in a field for which initial estimates, based on similar rock formations, showed potential reserves of between 300 billion and 1 trillion cubic metres of shale gas.

Traikov has said shale gas and hydraulic fracturing have the potential to reduce harmful emissions, boost energy security and cut Bulgaria’s almost full reliance on imported gas from Russia.

But the drilling for the unconventional gas has raised concerns throughout Europe that fracking, a process that involves injecting water, sand and chemicals to extract trapped gas, can contaminate water and harm the environment.

Last week opposition Socialists called for a moratorium on shale gas exploration in Bulgaria until reliable studies prove the work will not harm environment and not trigger earthquakes.

The government said in a statement Chevron would invest 4 million euros over five years on environment protection.

 

Source: Reuters

 

 

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May 26

Natural Gas for Europe shared an article today, that offers some fresh insight into shale gas in Europe:

The always excellent European Energy Review has an article on the geo-economic blessings of shale gas titled ‘An offer Europe can’t refuse’.

In an interview with EER, Frank Umbach, director at the The European Centre for Energy and Resource Security (EUCERS) and co-author of the recent report ‘Strategic Perspectives of Unconventional Gas’, says that established European energy producers have been skeptical of shale gas, due in part to not wanting to offend Russian gas monopoly Gazprom.

The article point to other reasons (or excuses, depending upon your viewpoint), as to why shale gas development is not being pursued at the pace that Umbach believes it merits.

Read the article from the European Energy Review HERE (registration required)

Source: Natural Gas for Europe

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Mar 24

Exxon Mobil Corp. (XOM) is among energy companies accelerating unconventional gas exploration in Europe as the region seeks to offset declining North Sea production and meet increased demand after nuclear generation was reduced.

Exxon drilled four wells in shale deposits and two in coal seams in Germany as well as its second well in Polish shale. Royal Dutch Shell Plc (RDSA) said it had “mixed” results from recent exploration in Sweden. Chevron Corp. (CVX) is looking for gas in Poland’s Lublin province while Austria, Hungary, Romania and Ukraine are also attracting interest.

Unconventional gas, trapped in shale, coal seams and impermeable sandstone, has reversed declining production in the U.S. and depressed prices. Europe may hold as much as 4 trillion cubic meters of the fuel, Wood Mackenzie Consultants Ltd. said yesterday. That’s almost twice the conventional reserves of Norway, the region’s second-biggest gas supplier.

“Europe is just starting down the path of unconventional production but we have some activities in the U.S. we’d like to leverage in order to move Europe forward on a more accelerated path,” Linda DuCharme, director of Europe, Russia and the Caspian at Exxon Mobil International Ltd. said March 22 at the Gastech conference in Amsterdam. “We expect Europe to be a significant part of future activity,” she said.

The risk of a nuclear meltdown in Japan after a March 11 earthquake and tsunami triggered public protests in Europe against atomic power and prompted Germany to order a temporary halt to the country’s seven oldest reactors, boosting gas use in power generation.

Read the full article at Bloomberg.com

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Feb 10

The Dutch Energy Council (Algemene Energieraad), the highest advisory body of the Dutch government in energy affairs, has come out strongly in favour of the development of unconventional gas in the Netherlands.

In an official advice to the government, the Council recommends a number of policies that should stimulate the exploitation of shale gas and coalbed methane in the Netherlands.

Most importantly perhaps, the Council advises the government to ensure that landowners and tenants benefit financially from unconventional gas development on their land, which would enhance public support for the exploitation of unconventional gas.

“Gas is an important role in the future at the expense of oil. We must therefore acquire a significant position in gas as a transit country also benefit from the increased production of unconventional gas. ”

In discussing the role of natural gas, the Council emphasized that in the transition to a low-carbon economy, gas-fired electricity generation is a better option than coal-fired power generation with carbon capture and storage (CCS).

According to the Council, even gas-fired power stations without CCS produce less CO2 than coal-fired power stations that capture 80% of their CO2. Gas-fired power is also more flexible and can be “greened” through the use of biogas. For all these reasons, ‘gas deserves a more prominent place in the EU’s climate and energy policy’ than it has now, says the Council.

Source: Natural Gas For Europe

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