Future of Shale Gas Industry Tied Strongly

to Advances in Enabling Technologies

Research PREVIEW for

Technologies Enabling Extraction of Shale Gas

2

Section Slide Numbers

Executive Summary 3

Research Scope and Objective 4

Key Findings 6

Technology Snapshot

• Introduction to Shale Gas

• Regional Distribution of Shale Gas

• Shale Gas Production

• Regional Development of Shale Gas

7

8

10

11

14

Impact Assessment and Analysis

• Impact of Technology Drivers/Challenges

• Impact of Market Drivers/Challenges

17

19

20

Value Chain Stakeholder Analysis 21

Enabling Technologies in Shale Gas Extraction 30

Technology Roadmap 37

Appendix 39

The Full Analysis Features the Following Content

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Key Findings

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1 The top technologies which are necessary in enabling shale gas extraction are: hydraulic

fracturing, horizontal drilling, microseismic monitoring technologies, ICT technologies (inclusive of

predictive technologies and leak detection technology) and produced water technologies.

2

In hydraulic fracturing there are now an increased number of players who provide base fluid

alternatives that replace water.

4

3

Future trend of shale gas development would be the adoption of smart integrated systems, which

improve efficiency and reduce the incidence of failures. Failure prediction systems, leak detection

software, advanced microseismic technologies would play an important role in the efficacy of shale

gas development.

The United States (US) is the key innovator and adopter of technologies enabling shale gas

production. The US has a number of factors which is conducive for the development of shale gas.

5 With advanced technologies and better management practices, many of the environmental

impacts could be reduced to a great extent.

4

Shale Gas Production

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Abandonment & reclamation

Production

Completion

Hydraulic fracturing

Casing and perforating

Well drilling

Road and well pad construction Shale gas production involves several steps. The sequence of

events in shale gas production are listed in the adjacent figure.

The first step in shale gas production would be the establishment

of a well pad, which requires several acres of land. Also additional

land is required for the road and other utilities.

The well pad provides a stable base for a drilling rig and other

associated equipment. The pad serves as the location of the

wellhead and other equipment.

Shale gas resources are located at great depths (varies from few

hundreds of meters to thousands of meters) and the shale

resources are horizontally spread.

Following drilling (vertical or horizontal), a steel casing pipe is

installed into the wellbore And cement is pumped into the void

space between the casing and the surrounding mineral formation.

Hydraulic fracturing then takes place , where the shale rock is

fractured using a high-pressure liquid (usually water that is mixed

with sand and chemicals) for the purpose of extracting the natural

gas from the shale.

During production, gas that is recovered from the well is sent to

small-diameter gathering pipelines that connect to larger pipelines .

The gas is collected from a network of production wells.

Following the production life, abandonment & reclamation of well is

done.

5

Impact Mapping of Drivers and Restraints

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Dri

vers

C

ha

lle

ng

es

1-2 years

3-5 years

6-10 years

Alternative

Fracking

Fluids

Advanced Drilling

Technologies

Well Integrity

Better Monitoring

Software

Seismicity

Key Drivers and Challenges

Impact Technology Factor Market Factor

Dependable Power

Source

Community

Resistance

1-2 years

3-5 years

6-10 years

Regulatory

Compliance

Legend:

Strong Weak Medium

Water

Contamination

Supportive

Initiatives

6

Technology Roadmap

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Short Term (2014-2017)

Long Term (>2020)

Medium Term (2017-2020)

Horizontal

drilling Hydraulic

fracturing

Waterless

fracturing

technology

Advanced

microseismic

technologies 3D hydraulic

fracturing model

Produced

water

technologies

meeting

disposal

standards

Produced

water

technologies

enabling

reuse

Pipeline Leak

detection

systems

Failure

prediction

systems

Most of the technologies listed in the

roadmap are already in the market, but not

all are being widely adopted.

It is expected that the technologies such as

3D fracturing would be more widely adopted

in the medium term by more players and the

impact levels would be in the medium range.

Technologies such as failure prediction

system, microseismic technologies, and

pipeline detection systems are expected to

become even more advanced and their

adoption would result in a high to medium

level of impact.

Waterless fracturing technologies though

already in existence would assume even

more importance in the near future and also

advancements would be seen, which would

give positive results to adopters.

The overall trend would be systems which

are smart. Smart systems would be

interconnected and having an inbuilt

feedback systems would result in improved

efficiency and reduced operational costs.

7

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ariel.brown@frost.com

Research Authors

Lekshmy Ravi

Industry Analyst

Technical Insights

Energy & Power Systems

Wai Fun Kee

Principal Consultant

Technical Insights

Energy & Power Systems

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