Mar 05

Shale Gas the future for Poland?

By ckeddy shale gas, shale gas in Europe 2 Comments »

US know-how could quicken development of shale-gas extraction technologies in Europe, while Poland’s hopes for the technology rise Europe can learn much from the US about how to use its shale-gas sources, according to Halliburton’s ( NYSE: HAL) expert on unconventional resources.

Speaking at the recent  III CE Gas Summit 2010 about whether US shale-gas development could be cloned in Europe, Reinhard Pongratz said that using US know-how could significantly shorten Europe’s learning curve. “If we are more aggressive in trying to deliver US technology to Europe, the development phase can be shorter,” he said. Not all technologies can be copied, but Europe can make much use of the knowledge, he said.

Mr Pongratz was also optimistic about the price of shale gas. “If [extracting shale-gas] can be done economically in the US, we can do it here,” he said.

In early 2009, Realm Energy International Corporation (TSX.V: RLM) began collaborating with Halliburton Consulting on a global evaluation of shale plays with potential for natural gas and oil production with an initial focus on Europe.

The idea of extracting shale gas gained momentum in Poland earlier this year, when Wood MacKenzie experts estimated that the country could be sitting on 1,400 billion cubic meters of shale gas. Other estimates put the amount at as much as 3,000 billion cubic meters.

Poland consumes around 14 billion cubic meters of natural gas per year. If the Wood MacKenzie estimations are correct, shale gas extraction could bring the country gas independence for 100 years, at current consumption rates.

Currently, Poland’s annual gas production from domestic sources equals around 4.1 billion cubic meters. About 70 percent of Poland’s gas for consumption is imported.

“We will know how much shale gas there is in Poland in about four years, when the licenses granted to companies looking for this type of gas in Poland will begin to expire,” said Henryk Jezierski, deputy environment minister and chief national geologist.

The first test drills will begin this year and Mr Jezierski estimates that commercial exploitation of shale gas sources will be possible in 10 to 15 years. In the US, shale gas currently constitutes about 10 percent of gas production, but is expected to reach 50 percent by 2020.

Source: Natural Gas for Europe

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Feb 05

Bloomberg Video: Shale Gas Maybe ‘Total Game Changer’ for Energy Market

By ckeddy energy independence, natural gas in Europe, shale gas, shale gas in Europe No Comments »

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Jan 29

Poland ‘Bubbles Up’ as Marathon Target for Next Shale-Gas Boom

By ckeddy natural gas in the USA No Comments »
ConocoPhillips and Marathon Oil Corp. are betting that Poland, which gets half of its natural gas from Russia, can yield a development boom in shale formations like those that drove a jump in U.S. output of the heating fuel.
The third- and fourth-biggest U.S. oil companies obtained exploration licenses this year covering hundreds of thousands of acres in Poland. The country, which imports 72 percent of its gas, could become an exporter of the fuel, said Maciej Wozniak, chief adviser on energy security to Prime Minister Donald Tusk.
“Everything leads to a conclusion that in four or five years, and this is how much time we have to prepare for this, Poland will become a place with quite a lot of gas,” Wozniak said in a telephone interview.
Shale developments, where rock formations are fractured and injected with water and sand to release trapped fuel, account for about 15 percent of U.S. gas output, according to Oklahoma City-based Chesapeake Energy Corp. After successes in the U.S., producers such as Houston-based Marathon seek to exploit similar geological formations around the world.
“We looked at a number of countries in Europe and through Asia,” Marathon Executive Vice President David Roberts told investors in a Nov. 19 presentation after the company obtained its license. “Poland bubbled up to the top of our list.”
Russia Reliance
Shale projects contributed to a drop in U.S. gas prices from a 2008 high of $13.69 per million British thermal units to a 2009 average of about $4.06.
Successful drilling wouldn’t end Poland’s reliance on Moscow-based OAO Gazprom, which disrupted gas supplies to 20 European nations in January on a price dispute with Ukraine. Poland’s gas-distribution monopoly, Polskie Gornictwo Naftowe i Gazownictwo SA, agreed Nov. 3 to contract with Gazprom for almost three-fourths of its gas until 2037. The deal is pending approval by governments of both countries.
“It would have no choice but to pay the price agreed to in the contract even if the price on the cash market falls due to additional supplies from the shale formations,” said Vince Kaminski, an adjunct professor at Rice University in Houston and former risk-management director at Enron Corp.
Gas discoveries could enhance energy security for Poland and neighboring countries such as the Czech Republic and Slovakia. Polskie Gornictwo, based in Warsaw, cut sales to the nation’s largest refiner, PKN Orlen SA, and the biggest fertilizer maker, Zaklady Azotowe Pulawy SA, after the Russian- Ukrainian conflict left Poland with limited supplies.
Energy Security
“Increasing natural-gas production in Poland, especially in such a sustainable way, is very important for us,” Wozniak said. “Given our situation and the problems we had over the last years with securing stable supply on the gas market in the country, this initiative is particularly valuable.”
Polish shale gas is “a long way off” from having a “serious” impact, Gazprom said in a statement. Long-term contracts are needed for gas users to secure supplies and for producers to finance infrastructure projects, the company said.
Polskie Gornictwo, which produces about 4.1 billion cubic meters of gas a year in Poland, plans to drill in shale formations with Marathon and Chevron Corp., said Piotr Gliniak, the company’s exploration director. It may turn out that Polish shale formations have too much water to tap using techniques currently employed in the U.S., he said. “It seems to me that at the moment, the foreign companies are a bit too optimistic about what may be found in Poland,” Gliniak said.
Silurian Shale
Representatives of Marathon and ConocoPhillips of Houston declined to comment for this article. If the 430 million-year-old Silurian shale that stretches through Poland proves to be “an economic resource,” 48 trillion cubic feet (1.4 trillion cubic meters) of gas could be recovered over decades, according to Rhodri Thomas, a project adviser at Wood Mackenzie Ltd. in Edinburgh. That much gas would sell for more than $240 billion at current futures prices.
ConocoPhillips has an option to develop as many as 1 million acres in the Silurian shale under an exploration agreement with Warsaw-based Lane Energy, the U.S. company said in a Sept. 9 presentation to investors. The companies plan to drill the first well near the northern Polish town of Lebork, said Kamlesh Parmar, country manager at Lane Energy.
Parmar said the concession area has all the geological attributes, including a thick and organically rich rock formation, to become a successful shale-gas development.

By Katarzyna Klimasinska

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