Roundtable F: Unconventional gas in EA

Over the last decade, the application of horizontal drilling with hydraulic fracturing, multi-well pads with longer laterals and improved stimulation techniques have substantially lowered the cost of producing natural gas from shale and coalbed formations. These developments all first occurred in North America. Unconventional gas resources are now being found elsewhere in the world, including East Asia, but a range of legal, economic, political, technological and geological factors threaten to constrain production in the short term. As technology allows these shales to become economically viable, the world supply of natural gas will become more elastic, tending to lower prices and increase demand. In addition, the regional distribution of production will change, altering patterns of international and regional natural gas trade and expanding liquidity, which could in turn undermine traditional long-term, oil-indexed bilateral contracts with more flexible, shorter term contracts possibly indexed on Henry Hub or NBP gas prices.

The three panel members of this roundtable will discuss the following questions:

• What is the potential for the production of unconventional gas, including CBM, in East Asia (e.g., China, Indonesia, Vietnam) given the numerous legal, economic, political, technological and geological constraints?
• What may be the impacts on East Asia of global trends in unconventional gas and CBM in terms of the supply/demand of gas, carbon emissions, LNG plans, price of gas in Asia, coal markets, renewables, etc.?
• What are the differences (business-wise) in producing, selling and buying unconventional gas from conventional?
• What business opportunities and challenges are there for region-based companies?