As indicated by the data issued from U.S. Energy Information Agency (EIA) in Jun 2013, global shale gas geological reserves was estimated 1013tnm3, covering 137 sets of shale formation in 95 shale gas basins of 42 countries including the States, located in 10 geographic regions. Technically recoverable reserve of shale gas was reported 220.69tnm3, added by 33.67tnm3 on the basis of data published in 2011.
So far, there are more than 30 countries on the world having started front end evaluation and related fundamental research on shale gas resources. Amongst them, the U.S. and Canada have realized large capacity commercial exploitation, China entered scale developing stage, and others remained in the initial stage of shale exploration. As estimated by ASIACHEM, 2014 global natural gas production totalized up to 3.46tnm3, with 295.5bn from shale resource, accounting for 8.55% of the total NG output.
United States
2014 U.S. shale gas output was around 272.7bnm3, accounting for 40% of the nation’s total NG production, and exceeding the 2013 output, 274.8bnm3, by 3.9%. Nowadays, commercial extractions are concentrated mainly in Barnett, Haynesville, Marcellus, Fayetteville, Woodford and Eagle Ford shale blocks.
The six blocks have shale gas reserves accounting for 93.7% of the nation’s total, and their totalized output in 2014 was predicted around 92% of the total U.S. shale gas production. In particular, Marcellus is deemed as the major formation in U.S. shale gas industry, taking a share of 38.4% in the nation’s total in the month of Jun 2014. As shown by an ASIACHEM carried on study, in the U.S., works of drilling, completion and fracturing on a horizontal well will take 20-30d, and cost on single shale well is averaged below CNY30mn.
Wet components from shale gas extraction, i.e. ethane and propane etc, are increasing in quantity with the shale gas output growth, and delivering abundance of inexpensive raw materials for downstream chemical processes. In the dozen years up to 2013, U.S. petrochemical industry had almost zero addition of new capacity, but after the silent decade, petrochemical producers started to invest in new plants as well as to reopen idled units. According to a statistics, there are 197 shale gas-based chemical projects currently in planning stage or under construction, with around USD125bn of capital investment.
China
By the end of 2014, China had drilled more than 400 wells for shale gas exploration & exploitation, found the first major shale gas field of 100bnm3 reserve in Sichuan Basin, and achieved commercial development breakthrough in the field. In 2014 China produced 1.3bnm3 of shale gas, 5.5 times over the previous year, and accounting 1.02% of the nation’s NG production and0.73% of gas consumption. Chinese shale gas industry has now entered up-scaled developing stage.
In 2014, China obtained a series of breakthrough in Shale gas exploring and developing technologies, and speeded up the pace of local equipment delivery. Gas field exploitation efficiency and economic benefit were continuously improved by successful application of “Well Factory” developing mode and accumulation of working experiences. Single horizontal well drilling cost was cut down to CNY5000-7000, while boring work schedule shortened from 5-7 down to 2-3months, with a shortest record of only 46d.
To cope with shale gas development, CNPC, SINOPEC and Chongqing Fuel Gas Group etc planned and built several regional pipeline networks for gas collecting & distribution. In addition, the first Chinese shale gas LNG plant started official business operation at the end of Dec 2014. Besides the usages as of civil gas, industrial gas and motor fuel, application of shale gas in chemical production also achieved progresses.
Canada
Next to U.S., Canada is the second country on the world started shale gas exploration and commercial development. In 2007, the first Canadian commercial shale gas reserve was put into development in Northeast Britain Columbia Province. Canadian shale gas activities are concentrated mainly in sediment basins located in western Canada, with most commercial extractions focusing in Horn River, Montney and Utica blocks.
2014 Canadian shale gas output was estimated 21.5bnm3, accounting for 15% of the country’s total NG production, and 21.4% of the domestic gas consumption. Canada gas output had been stagnated since 2001 and started to drop year by year after 2006. Success in shale gas development is a helpful make-up for the country’s decreasing NG production.
Argentina
Argentina takes the world No.3 position in the rank of technically recoverable shale gas reserve. In 2011, the country completed first horizontal and multi-stage hydraulic fractured shale gas well in Neuquén Basin, and obtained high gas flow. Also Argentina has furnished pipelines and other infrastructures necessary for shale gas development.
In 2013, Argentine state oil company YPF and Dow Chemical’s subsidiary in Argentina signed up a preliminary cooperation agreement, other oil/gas giants like Petronas, ExxonMobil and TOTAL etc also take positive attitude toward shale gas development in Argentina. However, owing to taxation and policy obstacles, as well as issues in equipment/chemical import etc, the country’s shale gas industry does go ahead but in stagnant paces.
European countries
Most of European countries are rather conservative in shale gas development, and dispute greatly on the safety of hydraulic fracturing. As early as in 2011, France proposed ban on shale gas exploitation, and the example were followed by Spain, Germany and other states and/or regions, by either ban or postpone decree. UK and Poland have respectively 80% and 75% of NG import dependency, so that the governments are more active in shale gas exploitation.
British government issued a series of stimulus policies in 2014, including tax exemption, 2mn pounds reward for innovative shale gas production & development processes, and set up of national colleges for shale gas related talent cultivation etc. But at the beginning of 2015, UK changed its position on shale resource development. In Jan 2015, UK announced to forbid hydraulic fracturing in national parks. By the same time Scotland Government stated to suspend grant of license for nonconventional oil/gas exploitation and stop the use of hydraulic fracturing process. Besides, Scotland Parliament also decided to delay the execution of 2 hydraulic fracturing projects proposed by British Cuadrilla Shale Company.
Since the end of 2013, as affected by the slow progression of domestic shale gas development and the leave of ExxonMobil, TOTAL and Marathon Oil etc, Polish Government has realized the need to take a series of measure in favor to shale gas development. The legislation carried out re-streamlining and reCompany Profile of shale gas development related laws and regulations, and made further clarification for finance tax stipulations. However Polish shale gas industry was once again heavily hit recently. Chevron announced to stop shale gas exploration in Poland because of too high investment cost. Poland Petroleum & Natural Gas Company (PGNiG) management once stated that the country’s shale gas business will need at least 6 years to become profitable.
Also in recent, TOTAL expressed to postpone its plan for first shale gas test well to be drilled in Denmark. European shale gas development has suffered from repeated upsets and is now in a stagnant state full of uncertainty.
India
In 2011, India discovered shale gas mine in Damodar Valley Basin. As assessed by Indian National Geophysics Research Institute, the country possesses 15tnm3 of shale gas reserve, by far above the prediction of EIA. Although India is rich in shale gas resource, so far no even experimental extraction has been done in the country owing to poor infrastructure conditions, depressed gas price, lack of investment, insufficient large scale development experience and shortage of water supply etc. In Jul 2014, deputy minister of Indian Oil Ministry said his country will held international bid invitation for shale gas development, the first run in India.
South Africa
South Africa is one of the shale gas rich countries in the black continent, and being always positive towards shale development. As early as before 2011, SA once issued license for shale gas exploration, but later suspended the grant. Similar to other countries and regions on the globe, SA also faces to significant pressure from environment protection. Besides, SA lags so far behind in the aspects of foreign investment regulations and supervisory measures, resulting in low capability in shale resource development far below the nation’s ambition thereof.
Other countries
By witness of the prosperity of shale gas industry in North America, many other countries and regions want to have their own try. In Oct 2013, Brazil initiated the nation’s first run of on-shore shale gas block tendering, but seemed attracted insufficient interest from oil/gas companies except for Shell and a few of others who already have granted license and developing plan in Brazil.
As a major energy source producer in the top rank on the world, Russia is for certain not wish to be left behind in shale gas field. But the nation’s shale development is facing to obstacles in laws, regulations, superCompany Profile and tax policies etc. And the sanction of EU and US on Russian energy field, caused by Ukraine crisis, cast another pall over Russian shale gas development.
In Jan 2015, president of Algerian National Oil & Gas Company (Sonatrach) stated that the company is to invest USD60~70bn in shale gas extraction. A prediction is that Algeria shall drill 200 shale gas wells every year and finally reach annual output of 20bnm3. The production target will suffice 50% of the nation’s yearly demand.
Other than the above, there are Ukraine, Saudi Arabia, Austria and Mexico etc also have once initiated works in shale gas exploration. However as known to ASIACHEM, most of them have so far no clear foreground to be capable of large size shale gas extraction.
Prospect
U.S. possesses successful experience in shale gas revolution and to continue the prosperity is not a difficulty. ASIACHEM would predict that by 2020, U.S. shale gas output may increase to account for 45% or so in the nation’s total NG production. Along with technology maturity and local equipment availability, China will drive into a fast lane for shale gas development. Proportion of Chinese shale gas output by 2020 in domestic NG production will also increase significantly up to 12%.
ASIACHEM estimates that by 2020 the global shale gas production will approach 429bnm3, around 10% of the world NG total. In a long term U.S. will lead the global shale gas development but show a gradually decreasing percentage in the globe’s total, from 92% of 2014 down to 88% or so by 2020. By that time the percentage of Chinese production would increase up to 7%, overpass Canada and becoming the world second largest shale gas producing country.
In general, before the year of 2020, most regions on the world, except for U.S., Canada and China will remain in initial stage. ASIACHEM predicted that the period of 2020-2030 would be a general fast developing stage for global shale gas industry, and followed by a mature developing stage in the period of 2030-2040. As estimated by ASIACHEM, that by the year of 2035, global shale gas production would account for 21% of the world’s total NG output.
The articles originate from ASIACHEM