Bernstein: Initial Results Show Challenges in European Shale Gas Development

A report from Bernstein Research comments that results from initial drillings for shale gas in Europe indicate that the continent is unlikely to match the U.S. boom in shale gas.

“Recent data from Poland’s shale gas wells validate our concerns about European shale gas: poor flow rates in over- pressured, hard-to-develop shales,” Bernstein analyst Oswald Clint.

The Lebien well (3Legs Resources) and Lebork well (Saponis Investments) in Poland’s Baltic Basin flowed at rates below those seen at fields in the U.S., in part because of pressure in the shale rock, Bernstein said.

Hydraulically fractured wells in the U.S.’s Barnett, Fayetteville and Marcellus shales, average 30-day flows ranging from 2 million to 4 million cubic feet a day.

Bernstein said that development of shale fields in Poland, the most aggressive of European nations in its pursuit of unconventional gas resources, would be further held back by a lack of land, water and drilling rigs.

Gas markets in Europe will continue to tighten, Bernstein said, citing declining indigenous production, increasing flows of liquefied gas to higher-priced Asian markets, peaking Norwegian output and gas-fired power demand climbing at a rate of about 1.3 percent a year.

“Conventional gas markets should tighten rather weakening on a shale gas boom.”