The global gas renaissance: opportunities for innovative exploration plays and new technologies in existing fields and unconventional gas resources in the liberalized gas market place: overview

Abstract

Of all the fossil fuels, natural gas is environmentally the cleanest, having a lower carbon content with respect to energy output than either coal or oil. Global demand for gas has risen steadily over the last decade and forecast demand growth now outstrips all other major energy sources. These two factors should dictate that gas will remain the energy source of choice until renewable alternative energy sources become readily and economically available. The UK is set to face a shortage of proven indigenous gas reserves. However, the known conventional global resources of natural gas are very significant, with reserves projected to last for 60 years at current production levels, and expected un-discovered resources predicted to exceed this figure. In addition, huge volumes of ‘unconventional’ gas resources are trapped in hydrates on the seafloor, in coal beds, in low-permeability sandstone reservoirs (so-called ‘tight gas sands’) or in shale deposits. Whilst the global resource base is good, the UK is set become a net importer of gas as the scope for significant new conventional resources is small, UK gas production is already very efficient, and opportunities for unconventional resources are limited. Traditionally, natural gas has been viewed as a stranded asset when located far from markets. However, since natural gas can now be efficiently converted to a liquid by cooling to −160°C, and then economically transported in ships, gas is now a mobile commodity like oil. The bottleneck of the European Interconnector, once seen as the key to UK gas supply, has thus been circumvented. Liquified Natural Gas (LNG) is being transformed from a small volume, exotic trade into a sophisticated global spot market, opening global gas exploration and production to deep waters and plays far removed from markets. Additionally, the steady advance of technology has played and will continue to play an active role in developing new gas exploration plays, optimizing recovery factors and rapidly monetizing reserves. Unconventional sources of gas will undoubtedly provide additional significant reserves, but on a timescale of ten years and beyond. The future of natural gas looks assured for some time to come.