“Shale gas in the United States of America (US) is re-defining the energy and chemicals markets. The exploitation of this unconventional energy source is changing the game on a global scale. According to the investment firm, PricewaterhouseCoopers (PwC), shale oil production could add as much as US$2.7trillion to the world’s economy. Consequently, if shale gas and shale oil production continues to expand across the globe over the next decade, this could boost the economies of European and Asian markets, potentially creating cheaper feedstock for refiners and chemical producers. The Middle East (ME) Petrochemical industry has boomed over the last few decades on the back of cheap gas and ethane feedstock (priced at $75c/mmbtu versus the historic $6-10 range in the last decade in the US and Europe). However, the growing local demand for gas by electricity producers and the limited supplies available has led to a diversification into propane/butane and naphtha based cracking plants in the ME where the price advantage is far smaller. In fact, there is so much “stranded” excess propane in the US now as a result of the shale gas explosion that the price has dropped to around $500/ton, meaning that for the first time in a generation it is cheaper in the US than the Middle East by about 23%. The potential effect of this on the ME producers could be very significant as their margins are squeezed and new capacity shifts to these new feedstock sources. The US shale gas/shale oil industry is already putting tremendous pressures on operators in Europe as they are now caught in between cheap chemical imports from the US and the ME.
However, the impact of fracking on the environment is a major concern for many governments and regulatory organisations. Currently, Europe does not have a universal policy or guideline regarding production of unconventional gas and until the European Union (EU) sets a clear standard, it will be difficult to see how European regions will be able to gain the same level of success as seen in the US. On a continued theme, technology is a crucial factor in the development of shale gas. In the US, there have been many international energy compa¬nies investing in North American shale production assets in order to learn how to translate unconventional development and technology. Knowledge gained from working with proven technologies, including process industry software, has meant that the US is one of the most economic regions for petrochemical pro¬duction and has helped to lower US natural gas prices making it is amongst the cheap¬est in the world. Pro¬ducers themselves can gain extremely lucrative margins if exports were delivered to higher-priced re¬gions, such as Europe and Asia. Many companies have turned to AspenTech to leverage process modelling to optimise the design and operation of their facilities from the gas gathering, compression to the processing, lowering costs and maximising profitability. Solutions for gas processing of conventional and unconventional hydrocarbons, including shale gas, are now widely available. aspenONE Engineering, for example, provides integrated solutions for engineering, monitoring and operational decision support of midstream assets, from gathering networks and pipelines to compressors and processing facilities. By delivering capital, performance and energy improvements across engineering design and operations, these solutions translate into millions of dollars in bottom-line benefits.
The debate over the benefits of shale gas will continue to rage over the coming years and its effect on Midstream gas processing. For many regions and energy companies, the ultimate test of compliance, accessibility and robust technology will be the key measures for its success to achieve operational sustainability and profitability.”
