ORDEM dos ENGENHEIROS
Lisboa, 20 de Novembro de 2013
“A REVOLUÇÃO do SHALE GAS e o IMPACTO na
MATRIZ ENERGÉTICA MUNDIAL ”
António Costa Silva
Presidente da Comissão Executiva
Ordem dos Engenheiros
Sumário
1. MUDANÇAS ESTRATÉGICAS e ESTRUTURAIS nos
MERCADOS de ENERGIA
2. O QUE É O SHALE GAS, TECNOLOGIA de PRODUÇÃO e
IMPACTOS na MATRIZ ENERGÉTICA
3. GAS CONVENCIONAL e NÃO- CONVENCIONAL e
TENDÊNCIAS de EVOLUÇÃO
4. IMPACTO no SISTEMA de TRANSPORTES
5. O FUTURO da MATRIZ ENERGÉTICA
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António Costa Silva – Presidente da Comissão Executiva
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Ordem dos Engenheiros
1. MUDANÇAS ESTRATÉGICAS e ESTRUTURAIS
nos MERCADOS de ENERGIA
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António Costa Silva – Presidente da Comissão Executiva
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GDP, Population and Primary Energy Consumption
Source: BP Statistical Review of World Energy June 2009
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POPULATION
7 billion people
GDP
65 trillion US$
2030
2012
WORLD CHALLENGES
POPULATION
8,5 billion people
GDP
130 trillion US
CAR FLEET
CAR FLEET
800 million cars
3 billion cars
OIL USE in DEVELOPED WORLD
OIL USE
14 barrels/person/year
OIL USE in DEVELOPING WORLD
Billions of people with better incomes
go from 3 barrels/person/year up to 3
or 4 times more
3 barrels/person/year
WORLD ENERGY MATRIX
. Oil Production is 5 times greater than
in 1957
. Renewables have established a more
secure foundation
. Oil/Coal /Natural Gas provide 80% of
supply
WORLD ENERGY MATRIX
. Dominance of Natural Gas?
. Consolidation of Renewables
. Solution for the transport system:
(electric/biofuels/GTL//fuel-cells)?
ELECTRICITY
ELECTRICITY
1,5 billion people without access
. Wide access and needs
WATER
WATER
700 million people with scarce resources
. How to lift restrictions?
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GLOBALIZATION OF
OIL DEMAND
OIL-SUPPLY CAPACITY
IS GROWING
• 85% of growth from
developing countries
• Combined effects of income
and population growth
OIL PRICE VOLATILITY
• Departure of oil prices from
economic fundamentals
• Oil price 25% above marginal
cost of production
• Improved recovery efficiency
• Role of unconventional oil
• Impact of Gas Shale
Revolution
• Technology improvements
• Expansion of oil output
KEY
FEATURES
of the OIL
and the
GAS
MARKETS
UNPARALLEL
INVESTMENT CYCLE
GEOPOLITICAL EFFECTS
•
•
•
•
Market instability
Perception of “supply” disruptions
The “fear factor”
Long-term oil price above 70
US$/bbl
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DE-CONVENTIONALIZATION
OF OIL SUPPLY
• US Gas Shale Revolution
• Impact on Oil Shale and Tight
Oil
• Build-up of US, Venezuela and
Canadian production capacity
• Brazil and Atlantic Basin PreSalt-discoveries
FINANCIALIZATION
OF OIL
• Commodity but also financial
asset
• New era of oil pricing dynamics
• From 2003 investment growing
1.5 trillion US$ every 3 years
• Investment in 2012 may reach
a new record (600 billion US$)
• Strong build-up of production
capacity
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Ciberterrorismo
• Ataques Sistema Informático Qatar Gas, Saudi
Aramco e NIOC
• Ataque a 15 de Agosto 2012 contra a Saudi
Aramco paralisou 30 000 computadores
• Vírus Shamoon / Stuxnet / Flame
• “Novo Pear Harbour Cibernético?”
• Novas Dimensões da Guerra: o ESPAÇO
DIGITAL
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ENERGY GAME CHANGERS in XXI CENTURY
UNCONVENTIONAL GAS
INSTABILITY in PRODUCING
COUNTRIES and THREATS
to SUPPLY
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INDUSTRY CATASTROPHIC ACCIDENTS
(e.g. OFFSHORE OIL Spills) and PUBLIC
IMAGE
EMERGENCE of PACIFIC BASIN as
TOP ENERGY CONSUMER
Ordem dos Engenheiros
António Costa Silva – Presidente da Comissão Executiva
FUKUSHIMA NUCLEAR
ACCIDENT
CLIMATE CHANGE and
ENVIRONMENTAL REVOLUTION
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Ordem dos Engenheiros
2. O QUE É O SHALE GAS, TECNOLOGIA de PRODUÇÃO
e IMPACTOS na MATRIZ ENERGÉTICA
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• The Revolution of the SHALE
GAS
• The Conceptual Innovation for
Shale Production
• US Learning Curve
– Footprint Concerns
– Induced Seismicity
• Knowledge of Rocks and
Evaluation of the Potential
• Can the US Shale Model be
exported?
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What is the SHALE GAS?
A world class source rock and a potential
shale gas reservoir – the DevonianMississippian Woodford Shale
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Unconventional Gas Definitions
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“The MAGIC FIVE”
1- SOURCE
Successfull acumulation!
Is it economic ?
2 - MIGRATION
4 - RESERVOIR
3 - TRAP
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SHALE GAS
●
Produced from artificially fractured shales
●
Source rock and Reservoir rock are the same
●
Tight shales enriched in organic matter
 2% < TOC < 20%
 Very low K (micro to nano Darcies)
 Very low ø (less than 5%)
 Can be carbonated
●
Most gas shales are marine source rocks
●
Till today no large commercial gas shale project outside USA
●
Estimated worldwide GAS SHALE RESOURCES: 16 000 tcf
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EXPLORATION AND PRODUCTION OF SHALE GAS
●
Expensive and requires specific technologies
●
In USA costs reduced by:
 Limited/focused exploration phase
 Production focused and pragmatism: - Drill, frac and see if it can be produced
- Drill, as much as you can
●
Gas transport to production wells requires conductive network of open fractures:
Technology/Price
Pyramide
1 000 md
HIGH
QUALITY
TECHNOLOGY
PRICE
100 md
MEDIUM
QUALITY
1 md
TIGHT GAS SANDS
CBM
Gas Shale
LOW QUALITY
Low Btu
Gas Hydrates/other
0.00001 md
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ASSESSING SHALE GAS POTENTIAL
Source: Gaffney & Cline, 2013
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EXPLORATION of SHALE GAS
•
•
•
Map areas where SHALES display high TOC content
Focus on low depth, high TOC and high tickness zones
Areas of very low or high thermal maturity
 very low maturity
favourable to biogenic gas
 very high maturity
favourable to thermogenic gas
 Map transformation ratios and/or vitrinite reflectance
•
•
Map Gas seepage if exist
Advanced Exploration with Gas Risking Analysis require more time, money
and data:
 Geochemical Assessment (shale maturity/gas potential)
 Geological Assessment (shale as “shallow” petroleum system)
 Petrophysical Assessment (ø/K/Mineralogical properties)
 Economic Assessment (Gas in-place estimation/CO2 risk)
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PRODUCTION SOLUTION:
HYDRAULIC FRACTURING
• Fracture Technology is responsible for
USA success in gas shales

Use large amount of
water in a short period
of time to develop a gas well

Addition of sand or other
material (proppants) to the
fluid to keep induced fractures
open
 Most wells are horizontal with
one or more horizontal legs
extending to the target sections
 The legs may extend more than
2 Km from the surface location
of the well
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Fractures & Stresses Regimes
SPE 110562
SPE 144321
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SHALE GAS: Rocks and Production Operations
Source: Shale Gas World – Europe 2011
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Micro-Seismic
SPE 136696
SPE 144321
SPE 135034
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Source: DOE, 2011
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Source: DOE, 2011
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Fracture modelling height and width
Geomechanics
SPE 144321
SPE-147226
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Shale Gas Well Performance
SPE 144321
Lewis et al., 2004
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US Gas Production Changes
Source: BP Statistical Review of World Energy June 2009
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WORLD TOTAL GAS RESERVES
Source: The Economist, 6th August 2011
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D
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F
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APPLICATIONS
DECARBONIZATION OF ECONOMY
. Gas is most versatile of fossil fuels
. Used both in power generation and
transportation
. GTL may be competitive solution for
transport in Medium Term
. Gas is the least poluent of fossil
fuels
. May play key role in transition of
energy paradigm
F
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GAS
DRIVERS
G
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G
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D
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V
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V
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EFFECTS OF JAPAN NUCLEAR CRISIS
. Decision of some countries to slowdown
nuclear power (Germany, Italy, Japan)
. Opens a more decisive role for Gas
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Private Ownership
of the Land
• Fosters dynamism
and individual
initiative
• Avoids burocracy and
complication
DYNAMICS of US
ENERGY MARKETS
• Role of small/medium
size Independent
Companies
US ENERGY LAW
• Promotes
Entrepreneurship
• Design mechanisms
• Incentives
CREATIVITY/
/INNOVATION
SERVICE
COMPANIES
• Drilling/Fracturing
• Logging/Operations
• Very active
• Easy access
• Ability to challenge
existing paradigms
• Invent new concepts
SUCCESS FACTORS of US
SHALE GAS MODEL.
INFRASTRUCTURE
Can it be exported?
PRODUCTION
SYSTEM
• Availability of
pipelines and
transmission/
distribution system
• Easy access
• Use based on a “pay
tariff”
• No Monopolies
• Active and mature
industry
• Production close to
pipelines and
consumers
• Water needs
GEOLOGY
• Huge basins with vast
resources
• Ability to design
incentives to tap
resources
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ENVIRONMENTAL
REGULATIONS
• Identity
environmental
impacts
• Act through
regulation not
through prohibition
ACCESS to
FINANCING
• Easy
• Simplified
• Supportive
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FT, 15 October 2013
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T
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E
. “The unconventional revolution”
. Shale Gas huge reserves
. 60% to 250% of conventional
. Developments in US world’s big
producer
. Implications for Middle
East/Europe
. Feasible solution for Middle East
domestic gas needs
. Exponential growth in trade
. Major role in Japan crisis
due to its flexibility
WORLD ENERGY MATRIX
“
.
Rapidly increasing
GAS CONSUMPTION
MARKETS AND
PRICES
. Increasing share of gas
from oil prices
(Atlantic basin)
. Is this a permanent
trend?
. Role of spot markets
more significant
. Atlantic basin before
Japan crisis split 5050 (oil and non-oil
indexed prices)
GAS TRANSPORTATION
ROUTES
GAS TRADE
. 10.1% growth in 2010
. Changes in structural
. Driven by strong growth in LNG
patterns
(22.6%)
. LNG flexibility and
. LNG accounts for 30.5% of global
versatility
gas trade
. Overcome difficulties with
. Pipeline shipments grew 5.4% led
by Russia
“Stranded Gas”
. Europe
anddos
Eurasia
account for 2/3
. Main threat from further
Ordem
Engenheiros
of Silva
pipeline
gas tradeda Comissão Executivacongestion in key
32routes
António Costa
– Presidente
. Rapidly increasing
. 7.4% growth in 2010
. The most rapid
increase since 1989
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. Underinvestment
. Constraints may arise
from current level of
developments
. Desindexation of gas
. In 2010 gas share 23.8%
. The highest on record
. Oil lost share last 11
years
. Gas: Future of Oil?
. 7.3% growth in
2010
GAS INFRASTRUCTURE
AND STORAGE
(+22%) and consumption
GAS PRODUCTION
G
A
S
I
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D
U
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T
R
Y
LNG
UNCONVENTIONAL GAS
RESERVES
T
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Y
US OIL SHALE: TEXAS HEARTLAND HEADS THE US OIL REVIVAL
Source: FT, 8th July 2013
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Source: BP
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Source: Energy Information Agency
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ENVIRONMENT ISSUES
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Source: Shale World Gas, Europe 2011
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FOOTPRINT CONCERNS
ii
AIR:
Emissions (CO2 & others…)
Noise and dust (trucks , operations…)
LAND:
Disposals (solid waste…)
Wildlife/Habitat disruption
Surface Footprint
Roads & Traffic
Induced Seismicity
Pipelines
Soil erosion
WATER:
Aquifers quality / contamination
Availability / supply
Sustainable management (flow back…)
Transparency in Operations
Regulatory Response
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ENVIRONMENT SOUND WAY?
Source: Shale World Gas, Europe 2011
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Frac Spread Surface Footprint
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INDUCED SEISMICITY
www.cuadrillaresources.com
Preese Hall-1, PEDL 165, Elswick, UK
Seismicity Magnitude vs Injected and Volume Flowback Volume
Stage 1: 12.385 bbl (incl. mini-frac) + 101.1 metric tons of propant
Stage 2: 14.710 bbl (incl. mini-frac) + 116.6 metric tons of propant
2,3 magnitude 10 hours after pumping
Operations stopped and additional monitoring stations installed
Stage 3: 5.031 bbl (incl. mini-frac) + 52.2 metric tons of propant
Stage 4: 10.590 bbl (incl. mini-frac) + 82.2 metric tons of propant
Stage 5: 9.870 bbl (incl. mini-frac) + 110.7 metric tons of propant
1,5 magnitude 10 hours after stage 4 pumping
Stage 6: Voluntarily stopped operations
Geomechanical study of Blackpool Seismicity on-going
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Source: Shale World Gas, Europe 2011
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North America Competition
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Environment Concerns
Source: AAIG, 2010
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Ordem dos Engenheiros
3. GAS CONVENCIONAL e NÃO-CONVENCIONAL e
TENDÊNCIAS de EVOLUÇÃO
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i
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BAKKEN Fm.
Recording fracturing with 35 stages
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Source: Shale gas World, Europe 2011
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Shale Plays Characteristics
Source: Shale Gas World, Europe, 2011
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LNG Prices move up on Shale Gas and Japan Crisis
(March 2011)
Source: Argus Daily LNG Prices, News & Analysis, 31st March 2011
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Source: DOE, 2011
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THE PRICE OF GAS
Source: BP Statistical Review of World Energy, Natural Gas and Geopolitics
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THE FUTURE OF LNG COST
Source: IHS Cambridge Energy Research Associates
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Source: 21st World Upstream Conference Global Pacific & Partners
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The U.S. may be the world’s fastest-developing shale gas industry,
but China is thought have more of the cleaner alternative to coal.
Source: International Business Times, 17 Oct 2013
China's shale gas basins are massive. The orange depicts
prospective basins while the yellow shows proven grounds. The red
lines are pipelines. International Energy Agency
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WORLD GAS RESERVES
UNCONVENTIONAL
GAS
UNCONVENTIONAL
OIL
• Coal Bed Methane
• Shale Gas
• Tight Gas and Ultradeep
reservoirs
•
•
•
•
•
Oil sands
Oil Tar sands
Coal-base liquid
Biomass-based liquid
Liquids from chemical
processing of natural gas
Conventional
Gas Reserves
6 600 tcf
30 %
Shale Gas
16 000 tcf
70%
TOTAL WORLD OIL RESERVES
Heavy OiL
15%
Oil Sands
Bitumen
30%
Extra Heavy
Oil
25%
Conventional
Oil
30%
Source: IFP
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EXPANSION of GAS UTILIZATION
● Substitute for power generation
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Use in transportation
●
Gas to liquids (GTL) technology improvements
●
Environmental pressures
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ACCESS TO NATURAL RESOURCES
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THE FUTURE OF NATURAL GAS
Gas should make the world a cleaner, safer place
Source: The Economist, 6th August 2011
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Source: Cedigaz
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GAS TRADE
 Global Gas Trade increased by 10.1% in 2010
 LNG shipments increased 22.6% driven by Qatar
 LNG imports: largest volumetric growth in South Korea, UK and
Japan
 LNG now accounts for 30.5% of Global Gas Trade
 Pipeline shipments grew by 5.4% led by growth in Russian exports
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WORLD TOTAL GAS PRODUCTION
Source: The Economist, 6th August 2011
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GAS GOLDEN AGE
GAS VERSATILITY
. Most versatile of
fossil fuels
. Gas may displace
oil as dominant fuel
. Increasing share of
world energy
matrix
. Used in power
generation and
transportation
UNCONVENTIONAL
GAS
. Floating LNG may change
production pattern offshore
projects
. GTL may open gas share in
transportation system
. Increasing use of renewables
may liberate part of gas for
exports.
WORLD GAS
MARKET
. Rapid booming of
gas demand will
require more
unconventional
. Huge reserves
. Competition with
LNG may be
“smoother” than
anticipated
. Going for a
global
Convergence?
. Or MultiRegionalization?
LNG
. Totally globalized by
2022/2025
. Finish the syndrome of the
“Stranded Gas”
. Flexibility in transport
responds quickly to shifts
in Demand
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TECHNOLOGY
PIPELINE
TRANSPORTATION
. It will play a major
role on interregional
flows
GAS SUPPLY
. Structural shifts in gas supply
availability
. Expansion in Qatar and West Africa
. Growth of unconventional gas
. Success of major projects critical for
the supply of Atlantic/Pacific basins
ENVIRONMENTAL
CONCERNS
. Differentials with
coal will not lead to
coal dominance
. Costs of nondecarbonizing the
economy
. Increasing role of
gas in a transition to
a more “clean”
paradigm
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4. IMPACTO no SISTEMA de TRANSPORTES
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CITIES are BEST
INVENTION of MAN
•Mark death of distance
•Rotating platform for markets and
cultures
•Connect human capital
•Cities are main drivers of innovation
THE NEED of a
PARADIGM SHIFT for
WORLD CITIES
CHALLENGES for FUTURE
CITIES
•More sustainable models
•Address energy security
•Smart grids
•New model for mobility
•There is no sustainability for future
without a new vision for the
development of more intelligent
cities
•Sustainability is a multidimensional
concept and needs to question the
excess of the constant growth
logic and fight the waste of
resources
•
•
•
•
Cities occupy 2% of planet surface
50% of world population
Consume 75% of energy produced
Responsible for 80% of CO2
emissions
CITIES with CURRENT
LANDSCAPE IMPLY
HUGE RISKS
•Frenetic urban growth
•Difficulties in resources
management
•Drivers of atmospheric pollution
•“Heat-Islands”
•Negative impact on earth climatic
system
•Key issue: transport system
NEW MODEL for CITIES
•
•
•
•
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Water management
Energy management
Residuals treatment
New role of transport system based
on public transport + electric cars +
evaporation of traffic jams
• New modes of access and
distribution of resources
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TRANSPORTATION FUELS TO SEE RISING DEMAND
Source: Exxon Mobil, the 2010 Outlook for Energy: A view to 2030
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THE GASEIFICATION of
US ECONOMY
SECULAR DOWNTURN of US
FUEL CONSUMPTION
• Gas replacing coal-power plants
• Peak oil consumption in 2005
• Last 7 years US oil demand dropped
by 14%
• GAS in the transport sector
(cities/trucks)
TECHNOLOGY IS
CHANGING THE WAY WE
LIVE, THE WAY WE WORK
AND THE WAY WE PLAY
EMERGING TRENDS in US
TRANSPORT SECTOR
• Even so US DRIVERS reached
in 2012 4.8 trillion km (14 000
trips to the sun)
• The change in way we live,
change the use of energy
• Growing urbanization
SHIFT in HABITS?
• Car-pooling schemes more
popular in US
• ZIPCAR more than 800,000 users
• No car taxes, no parking fees, no
mechanics bill, no car
dependence
• New generation with new vision?
• The growing “virtualization” of life
and Internet shopping
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US LOVE AFFAIR with
CARS SHIFTING?
• Effect of high oil prices and
financial crisis
• Number of passengers in
Amtrak in 2012 the highest
since 1971
• Oil consumption in California
in 2012 the lowest since 1998
• Chicago and other cities:
growing “PEDESTRIAN” and
more bicycle lanes
• LA public transport sector
reaching records (9 million
passengers per month in
2012)
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Energy Road Map and Solutions:
Many Possible Paths Leading to Same “Destination””
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CONVENTIONAL INTERNAL
COMBUSTION ENGINE
EXPONENTIAL INCREASE of
WORLD CAR FLEET
• 800 million cars in 2012 vs. 2.5 billion
(2030)
• Growing “dieselization” of fleet
• The Rankine cycle applied to ICE
• CAFE in USA (4.3 liters/100 km by 2025)
• ¾ of oil produced used in roads
ONGOING
TECHNOLOGICAL BATTLE
IN TRANSPORT SYSTEMS
• Business as usual (more
efficiency and ICE fuel-economy)
vs.
• Potential new disruptive
technologies (breakthrough in
electric storage/new generation
of batteries/role of electric
cars/fuel-cells/gas powered
vehicles/ /biofuels)
EMERGING TRENDS in
WORLD TRANSPORT
SYSTEM and
IMPLICATIONS for
FUTURE
• Oil accounts for 95% of
Transport Fuels
ON GOING REVOLUTION
IN SUPPLY PATTERNS
• More gas
• More unconventionals
• Role of LNG
• 16 million cars running on gas
(50% in Asia)
• Gas can be very competitive in
terms of prices specially in US
ELECTRICAL VEHICLES
PENETRATION?
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• In the US market more than 56
models of hybrid-electric vehicles
and battery-electric vehicles
• In 2012 sales of electric cars
increased 61% (500,000 cars
means 3,25% of the market)
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RISE of THE AUTOMOTIVE PATENT TECH WARS
Source: FT, 5 November 2013
THE FUTURE of WORLD ENERGY MATRIX
IEA : Global Energy use will increase 50% till 2030
By 2030 oil still important on world’s energy
To smooth the DEMAND growth it is not possible to roll back economic
growth
WHAT IS THE SOLUTION?
Find new technologies
Find alternatives to oil that can be:
- Economically competitive
- Convenient
- Reliable
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THE DOMINANT OIL MODEL
- Centered in oil and fossil fuels -
Biomass
+ other Renew.
Hydro
+Nuclear
Natural
Gas
Coal
10%
9%
25%
21%
35%
•
•
•
•
•
•
KEY FEATURES
Centered - oil model
No diversity
Flow in one direction
No good energy mix
Heavy and costly
No flexibility
Oil
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FINANCE ENERGY FORUM
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CITIES as ENGINES OF
INNOVATION
“THE WORLD is not FLAT, is
PAVED”, E. GLAESER
•
•
•
•
•
USA: 243 million people in 3% of
country (cities)
JAPAN: Tokyo (36 million) most
productive city
INDIA: 12 million(Mumbai)
CHINA: 12 million (Shanghai)
We choose cities in a planet with vast
space
•
Streets of Florence gave the
Renaissance
•
Streets of Birmingham gave the
Industrial Revolution
•
Today New York, London, Bangalore,
Tokyo: ability to produce new thinking
The FUTURE
of the CITY in
XXI CENTURY
WHAT SHAPE SUCESS of
TODAY CITIES?
CITY ISSUES
•
•
•
•
•
•
•
•
•
Urban planning
Urban policies
Adapt to Information Age or decline
Transportation model
Resources/Waste Management
Changes in Building construction
Role of IT/Digital revolution
Ability to produce new ideas
Capacity to react to recession
challenges: contraction of trade and
financial markets; tax revenues decline;
rising unemployment
• Ability to produce new thinking
• Rapid adaptation to Information Age
CITIES of TOMOROW
• Strength of cities reflect Social Nature
of Humanity
• Engines of innovation
• Major hubs: shipping, financial
• Major platforms for passengers transfer
• Ability to connect with one another
increases exponentially with IT/Digital
Revolution
• Global Interconnections combined with
proximity, density and closeness
• Urban ability to create collaborative
environments
• Cities thrive when they have many small
firms and skilled citizens
• MORE-IDEA–Intensive and better
connected cities
• IDEAS as ultimate creators of wealth
• The “Detroit” syndrome
• Gateways between markets and cultures
• New hubs and new centres of
innovation
• Ability to adapt to IT revolution
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• Ability to adapt to new transportation
models
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5. O FUTURO da MATRIZ ENERGÉTICA
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KEY CHALLENGES FACING
GAS BUSINESS TODAY
 Acess to gas resources
 Balancing Domestic vs. Export gas
 Economics of new projects:
•
Costs (gas price required in the market)
•
What pricing basis to use?
•
Differentiations to other fuels
 Financing of New Projects
•
Impact of global crisis
•
Priorities in capital allocation
•
Availability of sources
 Impact of economic crisis on global gas demand
 Supply uncertainties
 Role of technology (e.g. floating LNG)
 Environmental considerations
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Globally – Estimated Shale Gas in Place
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GAS MARKETS
 The European dilemma: long term buyers pay an oil related
price and lose money?
 Or will buyers pay a “Security of Supply Premium”?
 Gazprom in the long-term contracts decided to sell gas with a
10-15% Hub price element
 What will be the impact of European and USA market prices on
the support of new LNG production facilities?
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Middle East Gas Forum
Source: PIW, 26th Sept 2011
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FINANCING OF GAS PROJECTS:
MAIN CHALLENGES
 More challenging project plans and execution
 Loan tenors likely to fall
 Focus on potential for cost overuns and delays
 Economics will be challenged – more marginal
projects will not be financeable
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EUROPE – Estimated Shale Gas 2011
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Source: EIA, 2011
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European Shale Gas Exploration Targets
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Recovery Factors
Source: Gaffney & Cline, 2013
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GLOBAL GAS PRICES EVOLUTION
US Henry Hub
UK NBP
Japan
Europe
Source: Gaffney & Cline, 2013
Source: Argus, Datastream, Wood Mackenzie
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Source: DOE, 2011
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CONCLUSIONS
 Next decades may witness the Gas Golden Age with an increasing share of World
Energy Matrix
 Despite the importance of inter-regional flows, LNG markets will be totally
globalised by 2020
 In addition to LNG there are growing needs for pipeline imports in emerging
markets (Latin America/Middle East/China).
 Given that Gas Demand will boom significantly in the future, LNG supply and
unconventional gas will complement each other and competition will be much
“smoother” than antecipated
 Major importance of completion of big projects to supply both Atlantic and
Pacific basins
 Assessment of the impact of Global Economic Crisis on Gas Demand will be
critical to respond adequately
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GAS GOLDEN AGE
MAJOR UNCERTAINTIES
GENERAL
. Impact of economic recession on global
demand
. Role of domestic vs. Exported gas
. More dificulties in Financing
. Economics of new projects challenged
. Cost price differencial
UNCERTAINTIES IN GEOGRAPHYCAL AREAS
ASIA PACIFIC
EUROPE
. How much can buyers pay?
. There will be a premium for
security of supply?
. Evolution of demand?
. Volume flexibility from
pipeline contracts?
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MIDDLE EAST
USA
. LNG can compete
with domestic gas
supply?
. At what price?
. Recovery and
sustainability of
Ordem dos Engenheiros demand
. Domestic gas needs
fulfilled by
unconventional?
. More use of renewables
. Domestic vs. Export gas
António Costa Silva – Presidente da Comissão Executiva
. Asia will become a
multi-regionalized
market?
. Asian buyers
continue pay oil parity
prices to secure new
supply?
. Future new LNG
needs?
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OBRIGADO
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