It was reported today that Gazprom may delay the launch of its behemothic Shtokman gas field until 2018, which is just the latest in a long series of delays which appear to be linked to the economic crisis and development of shale gas in the US. Gazprom’s export chief Alexander Medvedev explains to the FT why he believes the emergence of shale gas cannot scupper the prospects of the Barents project:
Mr Medvedev predicted that, as with the internet bubble, many shale gas companies would be forced out of the industry. “The massive production of shale gas is impossible against a price which is below $6-$8 per million BTU,” he said. “Therefore we do not see in the development of shale gas any threat to us.”
However, some analysts suggest that his forecast might not be too wide of the mark.
Jen Snyder of Wood Mackenzie, the consultancy, said the pressure on uneconomic gas producers to drop out of the market, and the rising price of coal,which competes with gas as a fuel for power generation, could push gasprices to $5.50-$6.50 per million BTU by the end of next year.
MrMedvedev said investment bankers had proposed to Gazprom that it shouldbuy US shale gas assets, but it already had much more attractivereserves in Russia.
In 2009 Gazprom predicted that it would supply10 per cent of the US gas market by 2020, in part with deliveries ofliquefied natural gas from its Shtokman project in the Arctic waters offRussia’s northern coast.
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