INSTITUTE OF ENERGY STRATEGY

The Global Prospects for Unconventional Gas

Russian view

Alexey GROMOV

PhD in Economic GeographyDeputy General Director

Institute of Energy Strategy, Moscow

Key challenges and risks for the Global Energy Sector

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Oil Sands in Canada

Shale Gas in the USA

Heavy Oil in Venezuela

Oil extraction on Brazilian Offshore

Renewables in EU

Energy Consumption

Growth in ChinaOil of the

Middle East LNG in Qatar

Non Conventional Energy Sources in China

Lybia

Energy Regionalization is more actual than Globalization

In case of global instability and high volatility of oil prices, the major energy importers try to develop their own sources of energy, including UNCONVENTIONAL sources

Unconventional gas

• Shale Gas

• Coal-Bed Methane

• Tight Gas

• Methan Hydrates

• Biogas

“Golden Age” of Unconventional Gas is coming?

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FormerSoviet Union

Asia-Pacific North America

Latin America Europe

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Unconventional Gas resources are concentrated in the major energy importers countries

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Unconventional Gas can be cheaper than conventional gas…

Significant dependence on external supplies

But “Unconventional Gas” Revolution happened only in the USA…

Regional Gas balances 2011

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Who’s next?

Europe?

China?

The World?

Future role of unconventional gas in Europe

Unconventional gas in Europe can’t solve the problem of import dependence, but it will help to reduce it

Sources: Institute of Energy Strategy9

Shale Gas

The main restrictions of Unconventional Gas Revolution in Europe

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Europe: Not Unconventional Revolution but Energy Diversification

Own oil&gas production

Renewables

Unconventional Gas

Biofuels

CCS

Biomass

Geothermal Energy

Coal

The main goal is to reduce the energy import

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Unconventional Gas: the main consequences for Russia

Concurrence?

Sales Market loss?

decline of Russian Gas Industry?

• Russia has a huge conventional resources to develop production of gas• Unconventional resources will not play significant role in the gas mix in 20 years

Reserves, resources and production of gas in Russia

Sources: Energy Strategy of Russia for the period up to 2030, Ministry of Natural Resources of Russia13

Export expectations vs. reality

368

349

234

203

300

150

175

200

225

250

275

300

325

350

375

400

2008 (факт) 2009 (факт) 2010 2015 2020 2030

bc

m

Forecast 2030 max Forecast 2030 min Our expectationes

Risk of decrease in export on 15-20%

15-20%

Russian Gas Export forecast up to period 2030 Factors of decrease in export expectations

Europe: Competition growth

US: refuse of future Russian LNG (the boom of shale gas production)

Asia-Pacific: competition growth (Central Asia)

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Russia's natural gas exports to Europe will be stable

Sources: Institute of Energy Strategy15

But Russian share in EU gas market will be continue to decline…

Russia continue to lose price competition in Europe…

NBP spot Russian gas at the Germany border

Brent

doll. per tcm

doll. for barr.

But spot prices will grow, also limiting demand

Conclusion

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Thank you for your attention

www.energystrategy.ru

Alexey GROMOVDeputy General Director

Institute of Energy Strategy, Moscow

The Energy of the Future in our Hands