Polish Official Dampens Prospects of Early Shale Gas Flows

Ongoing investments in shale gas exploration in Poland are likely to bear fruit in 2020 or later, and credible estimates of production levels are still some four years away, according to the deputy environment minister.

"In four years, maybe three, we will know how much shale gas there is in Poland when exploration under already awarded licences is finished," Henryk Jacek Jezierski told Reuters on Tuesday.

"Production is certainly not possible in 2012, rather 2020, if not later," he added.

The comments poured cold water on some forecasts that production of shale gas could start as soon as 2012 after Saponis Investments reported gas on one of its concessions. (Read More on Saponis HERE)

Jezierski said several license proceedings were continuing but that the most sought-after areas were already awarded.

He added that once the exploration phase ends, but before the start of production, each of the license holders will have to pass environment checks and seek the ministry's approval to continue with production.

"Most mining is damaging to the environment, but we have to find a compromise. In case of shale gas the compromise will be found at an acceptable level of impact on nature," he said.

Environment hurdles are not the only thing that yet has to be decided. The government will wait to see how much unconventional gas is available before negotiating fees for its extraction.

"In Poland the state owns all the shale gas. As companies move into the production phase, they will be signing deals covering their right to use it," Jezierski said. "The price will depend on how much gas there is."

Source: Reuters