A Norwegian analyst believes the rapid changes in the world gas market might eventually put a stop to all offshore gas field developments in the Arctic.
Russian gas giant Gazprom now admits that alternative gas suppliers and the quickly developing markets for shale gas is putting the company’s development plans in jeopardy.
In a Gazprom meeting today, leader of the company’s export branch Aleksandr Medvedev will present assessments of the current situation in the gas market. Main issues will be the shrinking gas exports to the EU and the recently achieved gas self-sufficiency in the U.S., newspaper Kommersant reports.
Both issues will have serious consequences for Gazprom’s development plans. Already in 2009, gas exports and revenues fell dramatically compared to the previous years. Export volumes plummeted 11,4 percent to 140 billion cubic meters and revenues dropped from 64 billion USD in 2008 to about 40 billion USD in 2009.
The consequence for Gazprom might be that plans for the Shtokman field are abandoned. The 3,8 trillion cubic meters gas field in the Barents Sea, which is planned to supply the U.S. with LNG and the EU with pipe gas, has the last years been the company’s top development priority. Now, there might simply be no need for the expensive project.
While unstable Russian supplies and the stronger role of exporters like Qatar have had the strongest impact on the EU market, it is the quick and successful development of shale gas which has helped the U.S. become self-sufficient on gas. The latter might eventually change the whole global gas market, analysts say. That will seriously affect the plans of big gas exporting companies, among them Gazprom.
Oddgeir Danielsen, oil and gas expert in the Norwegian Barents Secretariat, believes shale gas is making the development of projects like the Shtokman field “highly unlikely”. He says to BarentsObserver that the repeated postponements of the project’s final investment decision well illustrate the current uncertainties in the market.
As a matter of fact, Mr Danielsen believes the ongoing changes in the world gas market is making the exploitation of hydrocarbons in Arctic waters significantly less attractive. The future industrial opportunities in the Arctic will be within transport, logistics and bio-resources, he argues.
