In the next decade Poland could become a major producer of unconventional fuel, alongside Romania and Ukraine.
KPMG, an international audit and consultancy group, published a report on shale gas exploration in Central and Eastern Europe. According to KPMG experts’ estimates three countries have the best chance of becoming large producers of the blue fuel: Poland, Romania and Ukraine.
To date Poland boasts by far the greatest advancement in shale gas exploration. The report notes that till June 111 concessions were issued to 30 firms. Marcin Rudnicki, partner at KPMG in Poland, believes that this country’s investor appeal is largely due to our potentially large reserves of gas, the well-advanced work on relevant legislation, and the considerable support, by the general public and politicians alike, for the projects underway. As they launch shale gas production, Central and East European countries could shake off their dependence on gas imports and, as a result, reduce the risk of gas cut-offs. “In 2010 some 69% of gas consumption in the region was covered by imports, on average, of which over 90% was supplied from Russia”, says Steve Butler, director at KPMG Energy & Utilities Advisory Practice. Also, shale gas will help meet the steadily rising demand.
Experts forecast that in 2011-2013 gas consumption in the EU countries will be rising by 1.6% a year. KPMG experts point to specific exploration and extraction conditions in the region. In their opinion both the geological conditions and the regulatory regime are vastly different from those North American companies, pioneers in shale gas development and extraction, were dealing with. In Central and Eastern Europe shale deposits are deeper (by 1.5 on average) than in North America. What with this and the wider temperature ranges, the rigorous environmental standards to be met and the necessity to adjust to different geological conditions, the cost of production could be even three times higher than in the U.S. As a result, project completion times and investment costs could shoot past earlier estimates.
Source: Rzeczpospolita, 10 July 2012, by Tomasz Furman