While Alberta is Canada's oil patch, to the west and north is British Columbia's Horn River Basin, and Exxon Mobil have just made (yet another) big shale gas find:
Exxon is most encouraged by the exploration of 250,000 acres it has leased in the Horn River Basin, in northern British Columbia. Mr. Cejka said results from the first four wells lead the company to conclude that each well will produce between 16 million and 18 million cubic feet of gas a day.
That's five times the size of average wells in Texas's Barnett shale and comparable to big wells in Louisiana's Haynesville shale, two major shale-gas fields that already have moved the U.S. natural-gas market from scarcity to abundance.
Why should UK energy buyers be interested in something 5000 miles away? Because we are interconnected whether we believe it or not. Horn River gas can flow for example into the US, pushing down Henry Hub and then UK NBP prices even further. Or in a couple of years it can be exported via LNG from the forthcoming Kitimat terminal. Kitimat was meant to be an importing terminal, bringing in Asian and Australian LNG to satisfy BC demand. But now the gas will flow the other way across the Pacific, which would mean less Japanese, Chinese and Korean demand for Mid East gas, which flows to Europe before sloshing back across the Atlantic and so on and so on.
But we don't want to tell you that. The good stuff is always below the headline:
Exxon's Mr. Cejka said that his company also has pieced together substantial leases in prospective shale-gas formations in Germany, Hungary and Poland, and is still adding acreage. Tests on two wells in Hungary, where Exxon and partners hold 400,000 acres, are expected this year. It will be the first time the shale there has been tested.
And that is one of the first times that Exxon Mobil has let the cat out of the bag about specific European gas intentions. When someone like Exxon Mobil starts talking about European Shale Gas, you know it's getting ready for primetime. And if there is shale gas in Germany, Hungary and Poland, we can quit worrying about Ukrainian shenanigans every winter.
And when of the biggest energy houses starts asking the same questions No Hot Air has been asking over the past year, maybe it will get to UK primetime sooner:
So far, companies are drilling for shale gas only in North America and to a lesser extent in eastern Australia, said Rhodri Thomas, head of consulting firm Wood Mackenzie, in Edinburgh, Scotland. "Where we've successfully developed these, the volume of the resource has changed the gas market dramatically," he said. "The question is: Where else could this happen?" AMEN
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