New: shale gas forecasts updated for 2019
11 March 2019
Homegrown UK shale gas - a bigger opportunity
Following the recent exploration drilling and flow testing in Northern Britain, UKOOG has revisited the shale gas forecasts first published by the Institute of Directors (IoD) in 2013.
- Central scenario for shale gas production per well increased by 72%:
- Each site at peak production could provide gas for around a half a million homes
- A balance of payments improvement of around £8 billion a year
- £1.8bn in community and local council benefits by 2035 - Estimates support generation of 64,000 jobs and £33bn of supply chain benefits
- Local job creation, supply chain benefits and community benefits in Lancashire and East Midlands in line with these estimates - UK geology indicated as having world leading mechanical properties and gas content
- High gas quality confirmed which could be injected into the Grid with minimal treatment
- Potential for just 60 sites to reduce import dependency by 50%
In 2013, the IoD had a central forecast of well production at 3.2 billion cubic feet (bcf) of gas over a 20-year lifetime, with an upper forecast of 4 bcf. This was broadly in line with US shale gas results.
Following analysis, UKOOG has revised these estimates upwards to a central case scenario of 5.5 bcf, an increase of 72%. This matches the current US average, with a high-end scenario of 8 bcf, which is in line with the best performing US shale basin, the Marcellus.
This means for a site with 40 deep drilled horizontal wells as modelled by the IoD, there would be enough gas at peak to heat 500,000 homes, provide supply chain benefits in the order of £333m and £40m of community and local benefits.
Ken Cronin, Chief Executive of UK Onshore Oil and Gas (UKOOG), commented:
"This is a very significant upgrade to previous estimates. The industry to date has invested between £400m and £500m in exploring for shale gas in the UK, creating local jobs and supply chain opportunities. The UK spends £7bn at present per year on importing gas into this country, generating next to nothing by way of UK benefits, leaving us less secure and creating a greater environmental impact as gas is shipped and piped in across oceans and continents.
"Last year the UK's LNG imports grew by 20%, with Russian LNG showing the largest increase at nearly 20 times the 2017 figures – the equivalent to supplying 1.6 million UK homes. Given these new projections, it now makes absolutely no sense to ignore our huge resource of homegrown gas.
"I am delighted at the way the industry has stepped up in delivering on the potential highlighted in 2013, and in fact there is a bigger opportunity. I have also been impressed at how the industry has worked together to improve performance at each new site. The reduction in drilling times has shown that the commercial prospects for the industry are growing in strength."
THE FULL REPORT CAN BE READ HERE: LINK
Media contacts:
Newgate Communications (Deborah Saw/Andrew Turner)
Email: ukoog @ newgatecomms.com
Tel: 020 7680 6550
· Central scenario for shale gas production per well increased by 72%:
o Each site at peak production could provide gas for around a half a million homes
o A balance of payments improvement of around £8 billion a year
o £1.8bn in community and local council benefits by 2035
- Estimates support generation of 64,000 jobs and £33bn of supply chain benefits
- Local job creation, supply chain benefits and community benefits in Lancashire and East Midlands in line with these estimates
- Local job creation, supply chain benefits and community benefits in Lancashire and East Midlands in line with these estimates
- UK geology indicated as having world leading mechanical properties and gas content
- High gas quality confirmed which could be injected into the Grid with minimal treatment
- Potential for just 60 sites to reduce import dependency by 50%
In 2013, the IoD had a central forecast of well production at 3.2 billion cubic feet (bcf) of gas over a 20-year lifetime, with an upper forecast of 4 bcf. This was broadly in line with US shale gas results.
Following analysis, UKOOG has revised these estimates upwards to a central case scenario of 5.5 bcf, an increase of 72%. This matches the current US average, with a high-end scenario of 8 bcf, which is in line with the best performing US shale basin, the Marcellus.
This means for a site with 40 deep drilled horizontal wells as modelled by the IoD, there would be enough gas at peak to heat 500,000 homes, provide supply chain benefits in the order of £333m and £40m of community and local benefits.
Ken Cronin, Chief Executive of UK Onshore Oil and Gas (UKOOG), commented:
“This is a very significant upgrade to previous estimates. The industry to date has invested between £400m and £500m in exploring for shale gas in the UK, creating local jobs and supply chain opportunities. The UK spends £7bn at present per year on importing gas into this country, generating next to nothing by way of UK benefits, leaving us less secure and creating a greater environmental impact as gas is shipped and piped in across oceans and continents.
“Last year the UK’s LNG imports grew by 20%, with Russian LNG showing the largest increase at nearly 20 times the 2017 figures – the equivalent to supplying 1.6 million UK homes. Given these new projections, it now makes absolutely no sense to ignore our huge resource of homegrown gas.
“I am delighted at the way the industry has stepped up in delivering on the potential highlighted in 2013, and in fact there is a bigger opportunity. I have also been impressed at how the industry has worked together to improve performance at each new site. The reduction in drilling times has shown that the commercial prospects for the industry are growing in strength.”
