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Shale Gas: How to Hedge the Value Proposition
Date: 8/1/2011
Houston, Texas, USA – (August 1, 2011) – KBC Advanced Technologies plc (KBC), a global provider of consulting and software solutions, today announced the release of the latest in its series of Global Energy Perspectives, this one focusing on the shale gas phenomenon.
Shale gas is one of the hottest topics in international energy markets and has the potential to be a true game changer. Large quantities of shale gas have been introduced to the markets and in the US have adversely affected domestic prices. As the shale gas phenomenon spreads globally, its impact will be uneven but significant. KBC believes one near-term hedge against price risk is exploitation of the associated liquids production.
There are significant reasons to exploit shale gas reserves, particularly in countries which are currently net gas importers, or require gas to fuel industrial expansion. As an example, Poland – an importer of Russian gas – now regards development of domestic shale gas reserves as an option to both replace coal-fired power generation to meet European Union emission restrictions and as a path forward to energy independence. While shale gas has already revitalised the US petrochemicals sector, there is a real risk of overcapacity as other countries such as China develop their shale gas reserves. Thus, while euphoria over shale gas seems to have captured the attention of the global energy market, there are underlying risks and challenges still to be considered.
This Perspective covers the changing dynamics and challenges introduced by shale gas into global gas markets, addressing topics such as:
Shale gas is one of the hottest topics in international energy markets and has the potential to be a true game changer. Large quantities of shale gas have been introduced to the markets and in the US have adversely affected domestic prices. As the shale gas phenomenon spreads globally, its impact will be uneven but significant. KBC believes one near-term hedge against price risk is exploitation of the associated liquids production.
There are significant reasons to exploit shale gas reserves, particularly in countries which are currently net gas importers, or require gas to fuel industrial expansion. As an example, Poland – an importer of Russian gas – now regards development of domestic shale gas reserves as an option to both replace coal-fired power generation to meet European Union emission restrictions and as a path forward to energy independence. While shale gas has already revitalised the US petrochemicals sector, there is a real risk of overcapacity as other countries such as China develop their shale gas reserves. Thus, while euphoria over shale gas seems to have captured the attention of the global energy market, there are underlying risks and challenges still to be considered.
This Perspective covers the changing dynamics and challenges introduced by shale gas into global gas markets, addressing topics such as:
- An unfolding global phenomenon
- Impact on "clean fuels"
- Potential to alter global gas trade flows
- Revitalisation of US petrochemicals, once again creating a low-cost advantage
- Environmental concerns that could hinder short-term production
About KBC:
For 30 years KBC has provided independent technical expertise and engineering software to enable leading companies in the global energy business and other process industries to manage risk while maximizing value from their assets. In times of economic uncertainty and increasing environmental pressure, KBC's proprietary methodologies and innovative software guide its clients' key strategic decisions, enabling them to prioritize and implement initiatives that maximize return on investment, and improve operational performance. KBC offers Strategic and Market, Capital Investment, Operating, Organizational, and Environmental Solutions. For more information, visit www.kbcat.com .
For further information, please contact:
KBC Advanced Technologies plc
Amy Holland +1 281 597 7913
Please click here to download a pdf copy of this release.
For 30 years KBC has provided independent technical expertise and engineering software to enable leading companies in the global energy business and other process industries to manage risk while maximizing value from their assets. In times of economic uncertainty and increasing environmental pressure, KBC's proprietary methodologies and innovative software guide its clients' key strategic decisions, enabling them to prioritize and implement initiatives that maximize return on investment, and improve operational performance. KBC offers Strategic and Market, Capital Investment, Operating, Organizational, and Environmental Solutions. For more information, visit www.kbcat.com .
For further information, please contact:
KBC Advanced Technologies plc
Amy Holland +1 281 597 7913
Please click here to download a pdf copy of this release.