1. INSTITUTE OF ENERGY STRATEGY
IES
INSTITUTE OF ENERGY STRATEGY
The Global Prospects for Unconventional Gas
Russian view
Alexey GROMOV
PhD in Economic Geography
Deputy General Director
Institute of Energy Strategy, Moscow

2. Key challenges and risks for the Global Energy Sector
IES
Key challenges and risks for the Global Energy Sector
Geopolitics
«Arabian Spring»
Geopolitical instability in the Middle East
Energy security problem (Russia-Ukraine, Lybia etc)
Economics
Economic Crisis in the Europe
State programs of decrease in an import of energy (USA, China)
Growth of own energy consumption in the export countries (Saudi Arabia)
Technologies
Unconventional “revolution” (shale gas, shale oil, methan-hydrates)
Shift to the Electric World (electric cars etc)
New energy logistics: (change of global energy flows) 2

3. Energy Regionalization is more actual than Globalization
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Energy Regionalization is more actual than Globalization
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 China
Oil of the Middle East
LNG in Qatar
Non Conventional Energy Sources in China
Lybia
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

4. “Golden Age” of Unconventional Gas is coming?
Shale Gas
Coal-Bed Methane
Tight Gas
Methan Hydrates
Biogas
Former
Soviet
Union
Asia-Pacific
North
America
Latin
America
Europe 5

5. Unconventional Gas resources are concentrated
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Unconventional Gas resources are concentrated
in the major energy importers countries

6. Unconventional Gas can be cheaper than conventional gas…
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Unconventional Gas can be cheaper than conventional gas…

7. But “Unconventional Gas” Revolution happened only in the USA…
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But “Unconventional Gas” Revolution happened only in the USA…
Significant dependence on external supplies
Regional Gas balances 2011

8. IES
Who’s next?
Europe?
China?
The World?

9. Future role of unconventional gas in Europe
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Future role of unconventional gas in Europe
Shale
Gas
Unconventional gas in Europe can’t solve the problem of import dependence,
but it will help to reduce it
Sources: Institute of Energy Strategy

10. The main restrictions of Unconventional Gas Revolution in Europe
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The main restrictions of Unconventional Gas Revolution in Europe
Economics: times more expensive than in the USA
Regulation: more complicated
Social: society doesn't want
Ecology: high risk of contaminations

11. Europe: Not Unconventional Revolution but Energy Diversification
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Europe: Not Unconventional Revolution but Energy Diversification
Biofuels
Own oil&gas production
Renewables
CCS
Coal
Biomass
Unconventional Gas
Geothermal Energy
The main goal is to reduce the energy import

12. Unconventional Gas: the main consequences for Russia
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Unconventional Gas: the main consequences for Russia
Concurrence?
Sales Market loss?
decline of Russian
Gas Industry?

13. Reserves, resources and production of gas in Russia
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Reserves, resources and production of gas in Russia
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
Sources: Energy Strategy of Russia for the period up to 2030, Ministry of Natural Resources of Russia

14. Export expectations vs. reality
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Export expectations vs. reality
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)
15-20%
Risk of decrease in export on 15-20% 12

15. Russia's natural gas exports to Europe will be stable
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Russia's natural gas exports to Europe will be stable
Sources: Institute of Energy Strategy

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

17. But spot prices will grow, also limiting demand
Russia continue to lose price competition in Europe…
doll. for barr.
doll. per tcm
NBP spot
Russian gas at the Germany border
Brent
But spot prices will grow, also limiting demand

18. Unconventional gas will help to smooth out the price of gas,
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Conclusion
There will be not “Unconventional Gas Revolution” in the Europe but diversification of European Energy Mix to reduce energy import
Unconventional gas will help to smooth out the price of gas,
but will not reduce it significantly
Unconventional Gas for Russia is not the source but the source of concurrence

19. Thank you for your attention
IES
The Energy of the Future in our Hands
Thank you for your attention
Alexey GROMOV
Deputy General Director
Institute of Energy Strategy, Moscow