Russia May Hold 680 Trillion Cubic Meters of Unconventional Gas

Russia, holder of the world’s biggest natural-gas reserves, may have 2 1/2 times more unconventional resources than conventional supplies, according to OAO Gazprom. (OGZD)

The country may hold as much as 680 trillion cubic meters of unconventional resources, which include gas from shale, sandstones and coal beds, Viktor Skorobogatov, director of the gas resources center at Gazprom’s VNIIGAZ research unit, said in an interview in the company’s corporate magazine.

Gazprom, Russia’s gas exporter, has concentrated on conventional gas as traditional fields continue to pump out fuel from western Siberia to the country's Far East. That focus saw the nation overtaken by the U.S. as No. 1 gas producer in 2009 as advances in technology made shale drilling economically feasible in North America.

Still, Russia had 44.6 trillion cubic meters of gas reserves at the end of last year, compared with 8.5 trillion cubic meters in the U.S., according to BP Plc (BP/) data.

“No country in the world can compete with Russia in terms of the volume of natural-gas reserves and its vast resource potential in both traditional and unconventional,” Skorobogatov said in the interview, excerpts of which were distributed today by e-mail. Russia’s conventional gas resources total at least 250 trillion cubic meters, out of a global total of 600 trillion to 650 trillion cubic meters, he said.

President Vladimir Putin in April urged Russian energy producers to “rise to the challenge” of a changing market as the U.S. increased output of shale gas. In October, he ordered Gazprom to report on its export policies after acknowledging that U.S. shale-gas production had become profitable.

Extraction of shale gas, which Russia is now “actively studying,” involves blasting a mixture of sand, water and chemicals underground, fracturing the rock to release fuel.

Russia’s shale-gas resources are estimated at about 5 trillion to 20 trillion cubic meters, Skorobogatov said. Hydrates account for about 75 percent of all the nation’s unconventional resources, or 500 trillion cubic meters, followed by tight gas at 110 trillion cubic meters and coal-bed methane at 50 trillion cubic meters, he said.

As much as 90 percent of Russia’s unconventional resources are located in the east, mainly in the Urals and Siberia, according to Skorobogatov. Coal-bed methane and tight-gas ventures, already under development as pilot projects, may start producing after 2020, while development of hydrates and shale won’t start before 2025 or 2030, he said.

To contact the reporters on this story: Anna Shiryaevskaya in Moscow at ashiryaevska@bloomberg.net; Jake Rudnitsky in Moscow at jrudnitsky@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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