Global unconventional gas market: North America dominates

Press Release   •   Feb 22, 2013 14:03 GMT

The global unconventional gas market, which includes shale gas, tight gas, and Coal Bed Methane (CBM) are spread across all regions of the world, and North America has the largest single share of unconventional gas resources globally. The US is estimated to hold about 50% of the total gas resources of the US, about 74 trillion cubic meters (tcm) (2,096.30 billiob cubic feet (bcf)) in the US. Shale gas reserves are also found in Canada along with tight shale and CBM reserves in the US. Canada is estimated to have unconventional gas resources of about 18tcm (510.06bcf), out of which 311.07bcf is shale gas resources, 141.68bcf is CBM and 56.67bcf is tight shale gas.

According to the International Energy Agency's analysis, Asia has about 2,635.31bcf of technically recoverable unconventional gas resources, followed by Organization for Economic Cooperation and Development (OECD) America with 2,181.92bcf. Latin America is estimated to hold about 1,360.16bcf of technically recoverable unconventional gas resources.

In 2011, unconventional gas accounts for about 8.33% of total global gas production. According to BP Statistical Review of World Energy 2012 estimates, total conventional gas produced was about 115,705bcf in 2011. Unconventional gas production was estimated to be around 10,522.46bcf in 2011 (BP, 2012).

Unconventional gas production is expected to grow to more than 17,339.94bcf by 2020. The US is expected to be the most prominent contributor to global unconventional gas production. US shale gas production is expected to increase from about 8,134.59bcf in 2012 to about 11,049.45bcf in 2020. Besides this, CBM production in North America and Asia-Pacific and shale gas development in other areas of the world will also make significant contributions to the production of unconventional gas by 2020.

Technological infrastructure constraints are affecting the development of shale gas and CBM in certain Asia-Pacific countries and in Europe. The infrastructure in several areas of the Asia-Pacific region requires urgent development before robust CBM development can be pursued. Australia and China are currently the leading countries there in terms of developing the necessary infrastructure for shale gas development, such as pipelines and Liquefied Natural Gas (LNG) facilities. Australia's planned LNG projects, aimed at undertaking the conversion of CBM to LNG, will start becoming operational in around three years.

Other Asian countries must develop their pipeline facilities if they are to facilitate the transportation of gas to demand centers and LNG facilities in order to support CBM-to-LNG projects. India, which is a major natural gas market and a key CBM destination, is currently affected by a lack of infrastructure necessary to effectively develop its CBM market. CBM operators in India have claimed that the present lack of supply lines and pipelines in the country has affected their operations. ONGC, one of the leading players in the country, has plans to relinquish a 30% stake in its four CBM exploration blocks there for this reason. Similarly, Vietnam also needs to address its infrastructure requirements before full-scale commercial CBM production can be achieved there.

Shale development in Poland will require the construction of new gas pipelines to transport the gas produced there to the domestic market. In order to export gas, Poland needs to construct gas transmission interconnectors. Poland currently has gas transmission interconnectors with countries such as Germany, Ukraine and Belarus. However, a large part of the existing pipeline infrastructure is aging and needs refurbishment.

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