Gas: The path to peak production Petex November 2008 Malcolm Brown, SVP Exploration 27 November 2008
Introduction: The path to peak production The rising demand for gas Supply growth dimensions Global proven and probable estimates Sources of unconventional gas Controls on peak gas Conclusions 3
The rising demand for gas Gas the advantages and the future Plentiful World Primary Energy Demand CAGR 2006-2030 Geographically available Transportable (LNG) 1.8% 2.0% 2.0% Spot market 1.0% 0.9% Flexible Unconventional…
The rising demand for gas Global gas trade recent past Algeria Middle East Trinidad W. Africa S.E. Asia Australia Markets LNG Pipe Source: BG Group Industry evolution: from three main trade regions 5
The rising demand for gas Global gas trade evolution Norway / Russia Sakhalin Middle East N.Africa Egypt W. Africa Trin / Ven S.E. Asia S. America Australia Markets LNG Existing & proposed Primary (20 mtpa) Pipe LNG…
Gas supply Resource industry supply growth dimensions Geography/politics NOC dominated / closed Higher risk Stable developing economies OECD Market Export Domestic O ns ho O ff s re h 3D or e s H ei…
Gas supply Hydrocarbon resource continuum Oil Gas Conv Conv Larger oil gas Higher volumes breakeven prices Heavy oil Tight gas More Increasing difficult to technological develop challenge Tar sands CBM / Shale Gas Shale…
Conventional and Unconventional Gas Plays Geological setting cartoon Unconventional Gas Coal Bed Methane (CBM) Land Surface Seabed Unconventional Gas Conventional Gas Conventional Gas Gas Hydrates Structural Gas Accumulation…
Gas supply Conventional and unconventional reserves Conventional Reserve Estimates 1P: Proven 6,263 tcf BP 2008 2P: Proven + Probable 9,000 tcf IHS 2007 3P: Proven + Probable + Possible No global estimate Unconventional Reserve…
Unconventional Gas Unconventional Sources of Gas Unconventional Gas Conventional techniques Tight Gas Tight Gas Shale Gas CBM Shale gas Gas Hydrates CBM Improved technology permits access to previously uneconomic resources…
Unconventional Gas Tight Gas Sands Global resource estimated at 7,406 Tcf (1,371 Tcf in US) NPC 2007 Pinedale Tight Gas Sands Development challenge - Fraccing and completions play Over 600 wells in an area of 90 sq. miles…
Unconventional Gas Shale Gas Global resource estimated at 16,112 Tcf (3,842 Tcf in US) NPC 2007 US shale gas industry Technological breakthroughs in completion technology reducing costs 1998 slick water fracturing replaced gel…
Unconventional Gas Shale Gas Production Operations Low-tech wellhead compared with conventional developments Frac-source water, flowback water, formation water must be handled according to environmental regulations Water…
Unconventional Gas Coal Bed Methane Global resource estimated at 9,051 Tcf NPC 2007 How is CBM produced Methane is adsorbed on the surface of the coal Gas held in place by water pressure As pressure is reduced methane…
Unconventional Gas Coal Bed Methane Australia Queensland Basin CBM Commercial CBM started in 1996 Compensates for shortfall in conventional gas Increased gas prices created opportunity Cross over technologies from mineral…
Unconventional Gas Coal Bed Methane supplying LNG projects Proposed Australian unconventional gas is QGC Australia LNG plant dominated by high quality, low cost Walloon Fairway CBM plays Early stage of exploitation Surat Basin…
Unconventional Gas Australia CBM: Berwyndale South Field Main processing centre - reciprocal compression Fed by field gathering system Satellite screw compression Low pressure wellhead separation and HDPE gathering lines 18
Unconventional Gas UK Coal Bed Methane plays CBM active in UK 13th licensing round May 2008 93 Petroleum Exploration and Development Licences awarded to 54 applicants 19
Unconventional Gas Gas hydrates Gas in a cage of water molecules at high pressure and low temperature Global estimate for gas hydrate reserves 100,000 tcf - WoodMac 2006 USGS estimates 85tcf of gas hydrates in Alaskan North slope
Unconventional Gas in the US market Forecast US gas production in 2008 US Unconventional Gas Growth 8 .5 Sub-division of US gas 8 .5 production (% 2008 forecast) Technological drive has Source: ARI intensified as conventional 31 S…
Unconventional Gas in the US market Has this peaked North American peak US Peak Production production 80 Mexico 70 Cdn Total 60 US Total Production Bcf/d 50 US Other 40 US CBM Mexico 30 Canada US Conventional US…
The Resource Pyramid Increasing Gas Price / Innovation Defining the controls on Peak Gas Gas Resource Pyramid Each side represents: Cost of Extraction Gas Price Host country tax regime Technology of the day Cost of…
The Resource Pyramid Increasing Gas Price / Innovation Defining the controls on Peak Gas Gas Resource Pyramid Each side represents: Cost of Extraction Gas Price Host country tax regime Technology of the day Cost of…
Conclusions Gas has significant advantages as a fuel, it has the lowest carbon intensity and continued growth is anticipated The path to peak production will be tortuous and challenging but is a long way off Peak Gas will be driven…
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