The international potential of natural gas has a number of shale gas development projects underway. Another Horn River basin in Europe would have a major geopolitical impact on EU / Russian relations.
But according to the Moscow Times, a Gazprom spokesman on Monday dismissed concerns that a growth in the production of shale gas would pose a threat to the company’s foreign sales.
Gazprom spokesman Sergei Kupriyanov reportedly said in an interview with Russia Today television;
“The speculations that shale gas is cheaper than the Russian gas are not true” He added, “It’s a big question whether they are going to make such investments now that the price of gas has dropped on the U.S. market”.
Major natural gas producers in North America have shifted focus to shale gas due to lower production costs. According to various sources, shale gas can reach a break-even point of $4.00 to $4.50 with cost improvements continuing to reduce these costs. Conventional natural gas has a break-even point around $7.00.
Contrary to Mr. Kupriyanov’s statements, major producer continue to invest billions into shale gas plays like BC’s Horn River basin, with many selling conventional producing assets to finance their strategic shift towards shale gas. And apparently low natural gas prices have not delayed plans for two pipelines to carry natural gas from Russia to Germany and Bulgaria under the Black Sea. Mr. Kupriyanov commented that the Nord Stream pipeline (Russia to Germany) was on schedule to be operational in 2011.
In recent years, Gazprom has cut off natural gas supplies to neighboring countries over price disputes. Many European countries are dependent on natural gas imports from Russia. A potential shale gas discovery within the EU or increased LNG imports, would be a welcome alternative to Russian supplies, and would have a big impact on Russian influence in eastern Europe that Moscow leverages as the primary natural gas provider.
Moscow Times: Gazprom: Shale Gas No Threat
