Shale Gas Bonanza Triggers Global Hunt For Supplies


The US shale gas fracking boom which has seen the gas industry access previously inaccessible reserves has inspired other countries to follow suit.

They have been stirred by the fact that the US, which was a major importer of gas, is now a potential exporter.

The coming boom will also lead to a huge demand for industry experts to share their knowledge around the world as increasing numbers of countries aim to tap their own resources.

One such country is Saudi Arabia which has begun investigating potential reserves to fuel long term growth and employment ambitions.

However, without massive investment in infrastructure, the kingdom is unlikely to capitalise on the resources.

Lack of capacity

Fracking demands huge amounts of fresh water to force the gas from rock or sand – the US estimates that its own annual fresh water demands for fracking are the equivalent of a city of 3 million people – and Saudi Arabia just doesn’t have that capacity to divert water.

In addition, America enjoys a pipeline, rail and road network for transporting shale gas which is something that Saudi Arabia also does not have.

The kingdom is looking to invest in desalination plants and nuclear power stations to help fuel them along with investment in roads, but the location of the shale gas reserves mean that the cost of production is too expensive.

Most of the country’s shale gas is trapped in oilfields and they are inaccessible currently under OPEC oil policy rules.

Though should production begin, they are unlikely to face environmental protests over drilling since the fields are in vast deserts.

Ban on imports

Saudi Arabia currently bans gas imports and has enough conventional supplies to meet demand in the coming years, but in the long term the country is looking to unconventional supplies to create an industry which employs many nationals.

In a league table of countries with sizeable shale gas reserves, Saudi Arabia would rank fifth.

The country with the largest supply is China, which has already signed deals to begin production of shale gas by 2015.

Those deals have been signed by inexperienced companies which are now searching for the expertise needed to realise their shale gas drilling ambitions.

Industry analysts are saying that China and Saudi Arabia will now need to use the services of companies which have experience and have established best practice in shale gas production.

Most of those companies have helped fuel the shale gas production boom in the US and they are increasingly hungry to develop opportunities in other countries and have begun setting up offices in Saudi Arabia to do so.

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