Russia's Gazprom mulls foray into U.S. shale gas

Russian energy giant Gazprom is mulling entry into the lucrative U.S. shale gas market, its export head said.

Russia's Gazprom mulls foray into U.S. shale gas

 

Russian energy giant Gazprom is mulling entry into the lucrative U.S. shale gas market, its export head said on Tuesday, as it looks to recover market share, particularly in Europe.

Russian government officials have said that rising shale gas production, which allowed the United States to surpass Russia as the world's largest gas producer in 2009, was a "problem" for state-run Gazprom as it has been losing its market share.

"We are looking for possibilities in the U.S.," Alexander Medvedev, head of export operations at Gazprom said, when asked if the company is mulling a foray into U.S. shale gas.

Shale gas, an unconventional energy source packed into tight rock formations, has transformed the U.S. energy market and now accounts for 15 percent to 20 percent of its natural gas output.

"Gazprom is moving into the U.S. shale gas to get first-hand knowledge about the new technology and its own future," Mikhail Korchemkin at think tank East European Gas Analysis said.

Gazprom has suffered a big loss in its European sales because expensive Russian gas was unable to compete with liquefied natural gas, he added.

The U.S. shale gas boom helped it to extract more gas than Russia last year for the first time since 2001. Russian output was also hit by declining European demand during the economic crisis, as customers switched to cheaper liquefied natural gas.

As energy giants such as ExxonMobil and Royal Dutch Shell snap up licences in Sweden, Poland, Germany and France to explore for shale, major discoveries could shift the balance of power in Europe's relations with Russia.

In February, Gazprom launched its first-ever project to extract gas from coal, another recently emerged technology, and has also been interested in a project to pipe gas via Canada to the United States market.

Reuters

Last Mod: 08 Haziran 2010, 22:49
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