Here is what is going on in the natural gas industry around the world:
Poland’s Treasury Minister Mikolaj Budzanowski says a much-awaited law that will regulate shale gas production should be adopted this year, helping to develop the potentially lucrative sector.
Poland has been the most aggressive in Europe in pursuing shale gas, a form of natural gas that is trapped in rock and requires new technologies to extract. Environmental activists say the extraction process is highly polluting.
The government hopes shale gas will boost the economy, reduce dependence on Russian gas imports and cut energy prices. It estimates Poland’s shale gas deposits may secure production for at least 25 years.
International companies are exploring for the gas but are waiting for the new law, which will regulate tax on production and terms of distribution, before they commit to a longer-term strategy.
The Czech Republic’s Gazelle natural gas pipeline has been opened. The pipeline connects to the Nord Stream pipeline, and will provide an alternate route for Russian gas imports to the EU.
Prime Minister Petr Necas opened the 10 billion koruna (US$ 519 million) Gazelle project recently.
Built by pipeline operator Net4GaS, the 166 km (103 mile) Gazelle pipeline is connected to Nord Stream, a twin pipeline system with the capacity to carry 55 billion m3/yr of natural gas from Russia across the Baltic Sea to the energy markets in the EU.
Through the Czech Republic, the gas will flow on to southern Germany and France.
The EU has been seeking new ways to secure energy supplies since Russian gas transported through Ukrainian pipelines were cut off in January 2009 due to a dispute between the two countries.
Ukraine took a step closer to a breakthrough shale gas deal with global energy major Royal Dutch Shell on Wednesday when local authorities in the eastern Donetsk region approved a planned production sharing agreement.
The former Soviet republic, which hopes its big shale gas reserves will help end reliance on costly imports of Russian natural gas, chose Shell last May as a partner to develop the Yuzivska field.
Deputies of the Donetsk regional council voted to approve the deal with Shell, removing one of the final hurdles to an agreement.
Ukraine is said to have Europe’s third-largest shale gas reserves at 42 trillion cubic feet (1.2 trillion cubic metres), behind those of France and Norway, according to the US Energy Information Administration.
“If exploration is successful in the Yuzivska area, we will be able to produce a few billion cubic metres (bcm) of gas per year in just five to six years and eight to 10 bcm in 10 years,” Environment and Natural Resources Minister Oleh Proskuryakov told the council.
“At its peak, in 13 to 15 years, annual production may exceed 20 bcm. This will not only strengthen our energy independence but will also significantly reduce gas prices.”
“Secondly, the Yuzivska area production sharing agreement is the biggest project in Ukraine that will attract tens of billions of dollars in investment,” Mr Proskuryakov said.
“Shell sees investment at US$10 billion (S$12 billion) under the most likely scenario and over US$50 billion under the optimistic scenario,” he added.
Shell’s office in Ukraine declined to comment on the figures or any expected date for signing a deal. Under the terms of the tender, the two sides have until May to sign a contract.