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Coal to gas opens up as Gazprom goes unconventional
Published: 12 February, 2010, 19:44
Edited: 15 February, 2010, 13:47
TAGS: Investment, Markets, Natural resources, Gas
Russia has launched its first project to extract gas from coal. Gazprom is starting the project in West Siberia, where president Medevedev has met with the country's fuel producers to discuss Russia's energy future.
Unconventional gas – produced from coal or shale – is a major domestic energy supplement in the United States. Now Russia's Gazprom is ready to give it a try.
Industry players, such as Viktor Vekselberg are warning its growing popularity today could cause it to become conventional tomorrow.
“One of the reasons dramatically changing the picture of the global gas market is a sharp increase in the development of gas from so-called unconventional sources. The growth volumes of unconventional gas tripled in relation to traditional gas over the last three-four years. Projects targeted at liquefied natural gas supplies will now be shifted to other territories.”
The developer of Kovykta gas field says soon North America won't need Russian gas, and demand from Europe is also waning. Aleksandr Nazarov, Senior Analyst at IFC Metropol says Russia should look east.
“To hedge risks Russia needs to sign long term contracts with China.”
Gas producers say Russia's gas market should be de-monopolised. That would allow competing gas producers to provide the market with better prices, and make it harder for unconventional gas to rival conventional.
12.02.2010, 19:38
11 comments
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Some people sound like broken records. No matter the topic --- Russia must decetralize, de-monopolize, etc. etc. The issue of coal to gas is hardly the issue of Russian corporate structure. The centralization of decision making did not hurt China, and it will not hurt Russia provided that it does not flirt with silly innovations. The alarms are not well founded. One of the biggest problems of coal, or shale gas, is the POLLUTION. This is one of the most toxic processes imaginable, and it will not be long before the screws tighten on its large scale pollution. If Russia could find a way to produce it, minus the pollution, that would be worth a try. As for the lack of markets, what a nonsense. There are still vast places on earth that the modernity and economic devleopment has not touched. These are all future markets. And Russia will become much, much bigger market for gas, as its economy expands. Europe may at the moment see slack, but this is only temporary. Europe wants to convert a great deal of its oil-based industry to gas, and the conversion is only starting. It is oil that will be under pressure, but even then, the new development around globe will increase the demand.