US Shale Gas Revolution

Shale gas is natural gas that is found trapped in shale formations or "resource plays". Shale gas has been produced for years through natural fractures but the first economical shale fracture was achieved in 1998 by George Mitchell in the Barnett shale field in Texas. Since then, technological advancements in the form of hydraulic fracturing or "fracking" and horizontal drilling have enabled a huge increase in shale gas production contributing to what is commonly known as the "shale gas revolution".

The US has an estimated shale gas reserve of 862 trillion cubic feet (tcf). The development of shale gas in the US has become a major 'game changer' in the US gas market and by extension the global gas market. The US, once a major LNG importer is expected to sustain its domestic gas requirements and export its first LNG cargo in 2015.

In its Annual Energy Outlook for 2014, the EIA predicts that the US will become a net exporter of LNG in 2016 and an overall net gas exporter in 2018. It also states that US LNG exports from new liquefaction capacity is expected to surpass 2 tcf by 2020 and increase to 3.5 tcf in 2029. . Furthermore, North American shale gas production is expected to grow by 5.3% per annum to reach approximately 54 bcf/d in 2030.

Many buyers have already turned to the US as an alternative LNG supplier. Over 50 million tonnes of offtake contracts have been signed (some preliminary agreements and some finalised Sales and Purchase Agreements).

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