Energy Intelligence Series: "Unconventional gas: A new paradigm"

T o subscribe to BNamericas, please contact: Daniel Bekker at [email protected] or call +56 (2) 941 -0366 July 2010 EXECUTIVE SUMMARY this month’ s series : The development o new technologies has allowed or the exploration o economically enormous amounts o unconventional natural gas resources. I we add up the recoverable reserves o conventional and unconventional gas extracted using current technologies and at the current rate o consumption, the planet could be ensured enough supply or the next 250 years. Drawn up by specialized consultancy frm Gas Energy or Business News Americas, this report examines the inherent aspects o unconventional natural gas that will be key to incorporating new reserves and starting up production at competitive prices, all o which support our theory. It looks at trends or gas and oil prices, brie ly de ines unconventional gas and its existing potential, it explores the technologies that have in luenced cost and allowed or explosive development and production in the United States, and it also takes a look at the technological and environmental challenges acing the industry. This report also reviews the potential and outlook in other regions around the world and analyzes whether it is possible to recreate the success o the United States, providing an overview o the commercial, geopolitical and regulatory interests that are behind this new paradigm. Unconventional gas: A new paradigm Power for the 21st century Natural gas held a 24% share o the global power grid in 2009. Gas Energy estimates that this percentage will increase considerably in the coming decades since sustainable developme nt o the planet will be based on an abundant energy supply that is much cleaner and more efcient than other ossil uels. We can say, without a doubt, that natural gas will be the power source o the 21st century and the gateway or transitioning to cleaner renewable energies in the uture. LNG It also takes a quick look at the impact o unconventional gas developments on the LNG industry in the short and long term, and considers the actors that, in a certain way , will reinorce the gas industry’s regional nature beore it goes global. The recent BP oil spill Gas Energy believes that the accident on BP’s Deepwater Horizon platorm in the Gul o Mexico which occurred last April and its terrible environmental impact create an additional actor that will redirect more resources and technology to the search or and, development o, ample unconventional onshore resources, not only natural gas but also oil. Volume High quality reservoirs Low quality reservoirs Tight gas Coalbed methane Shale gas Gas hydrates Conventional Unconventional Larger volumes More advanced technology needed Higher concentrations Easier to develop More permeable Natural Gas Resources Pyramid Source: Gas Energy based on data from IEA – WEO (2009) E x p l o r a t i o n r i s k i n c r e a s e s ; p r o d u c t i o n c o s t d e c r e a s e s .

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Energy Intelligence Series: "Unconventional gas: A new paradigm"