Albertan Natural Gas Producers Are on the March Again
An Alaskan pipeline is back on industry agendas for the future
“Gas drilling has more than doubled” in North America in the past seven years, adding 31 trillion cubic feet of reserves, estimates Will Hussey, a vice-president of ConocoPhillips Gas & Power. But official reserves accounts are conservative.
“When you look at shale, you don’t look at it in the same way as conventional gas. There’s a lot of shale gas out there, but you can’t book the reserves until they’re producing. So that [reserves] number is probably understated,” Hussey adds.
“A year ago I said the United States was on the decline, but I am happy to say people proved me wrong,” Hussey says. He displays a U.S. map that highlights 20 developing shale gas areas. The action is spreading north.
In the Western Canadian Sedimentary Basin, “drilling is picking up again,” says David Slater, managing director of Nexen Marketing U.S.A. Inc. Spurred by American successes in unconventional supplies and strengthened prices, Nexen and others have staked out shale gas prospects in the Horn River Basin in northern British Columbia. Slater also raises hopes for a revival of fledgling Canadian coalbed methane extraction.
Costs to develop these more difficult resources can average US$6-$7 per thousand cubic feet, Hussey estimates. But even those expenses leave North American natural gas with a competitive edge against prices of US$15-$25 on tanker cargoes delivered in Asia, where contracts are usually tied to oil, says Kathleen Eisbrenner, Shell Gas & Power vice-president for global LNG.
The globally traded product is liable to become even costlier. “Many countries are now planning to import LNG for the first time. Countries as diverse as Brazil, Chile, Germany and Singapore, just to name a few,” Eisbrenner says. “China has entered the global LNG market in a big way, moving quickly from acquiring its first spot cargo in 2006 to signing up for several large long-term contracts in 2007 and into 2008.”
Currently there are 17 LNG importing countries and 15 exporters. By 2012 there are expected to be 29 importing countries and 18 exporters.
Porter Bennett, president of Bentek Energy, describes the North American industry as “replumbing” itself to connect new production with demand centers. Numerous American pipeline and storage projects are underway and include Canadian participation.
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