Shell to expand shale gas production

London – Shell is working to produce more natural gas and by 2012 our production will be more gas than oil, with production of gas trapped tightly in rock pores, known as tight gas, becoming a rapidly growing part of the picture.

Tight gas is natural gas held in rock pores up to 20,000 times narrower than a human hair. Often the gas will not flow freely into a well, or it flows at a much slower rate than in normal gas reservoirs.

The amount of gas that would be recovered from each well would be low but the overall volume of available gas in the reservoir can be much higher than conventional gas reservoirs.

Shell has decades of production experience with tight gas - in the North Sea, mainland Europe and North America. At its operations at Pinedale, Wyoming, for example, the company is now able to drill wells over twice as fast and at 30% less cost than when it started.

Engineers must drill many more wells than in a conventional field to access volumes large enough to make a project worthwhile.

Shell uses seismic sensors and advanced software to map out underground fields and pinpoint the best locations to drill. Steerable drills are employed to extend many wells horizontally into the rock, often up to 2.5km away, from one location on the surface. This also helps to increase efficiency and lower the environmental impact of our operations.

Engineers crack open the rock at selected intervals within the well by pumping fluids (mainly water) into the well bore, a technique known as hydraulic fracturing. This releases the gas and helps it to flow.

Shell started producing tight gas in the early 1950s in south Texas, but it is only in recent years that technologies and improved efficiency have allowed us to produce high volumes of gas economically from some tight gas fields.

One of its current major tight gas projects is at Pinedale, which produces around 350 million cubic feet of gas a day – enough to power 1.6 million US homes. Elsewhere thew group is working in a partnership to explore the Haynesville field in Louisiana.

In western Canada, Shell acquired the Duvernay natural gas company in 2008. It also produces enough tight gas in the Groundbirch area of British Columbia, Canada, to meet the needs of over 400,000 Canadian homes.

Most recently, Shell bought land containing shale gas in the Marcellus field in north-east US and in the Eagle Ford field in south Texas. These acquisitions brought Shell’s total tight gas land holdings in North America to over 14,500 square kilometres.

Outside North America, Shell is producing 117 billion cubic feet of tight gas a year at the Changbei field in China, and is exploring for more resources in other parts of the country.

In Australia, the group acquired Arrow Energy in 2010 in a A$3.5 billion joint deal with PetroChina, to produce another form of tight gas called coalbed methane - natural gas found in coal seams.

In Germany, Shell is in a joint venture to explore for tight gas in the Lower Saxony Basin. And we are in the early stages of assessing potentially major resources of shale gas in Sweden and South Africa.

“China and Europe are not yet experiencing the same transformation in energy security as North America,” noted Shell. “But tight gas is expected to play an important role in providing these regions with a cleaner, more secure energy supply and we are working to develop its potential.”

Environmental issues

All Shell’s tight gas operations use hydraulic fracturing to break open rock and release the gas. This, it says, is ’a safe and proven technique’, citing the opinion of the US Environmental Protection Agency, which is now carrying out a new study into hydraulic fracturing and its potential impact.

“Fracturing has been used by oil and gas companies for over 60 years. Government legislation is designed to protect drinking water aquifers including from potential contamination by fracturing fluids and this is a high priority for Shell,” said a Shell statement.

“Fracturing typically takes place a kilometre or more (thousands of feet) below drinking water supplies. We insert concrete and steel barriers into the wells as standard practice to prevent any drilling or fracturing fluids from entering into local water supplies,” it added.

According to Shell, specific social and environmental challenges vary from region to region, citing, for example how Pinedale is situated in the rural Rocky Mountain region and teems with wildlife: antelope, mule deer and sage grouse are common here.

“We have implemented a number of environmental measures with the aim of protecting local biodiversity, keeping air and water clean, and reconstructing the land once drilling ends,” said Shell.