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Shale boom won't last, Gazprom says

Feb. 21, 2011 at 8:54 AM   |   Comments

MOSCOW, Feb. 21 (UPI) -- The boom in shale gas in the United States won't last as production costs face competition from other sources, officials at Russian energy company Gazprom said.

A depressed U.S. economy means prices have kept Gazprom out of the U.S. energy market. Alexander Medvedev, deputy chief executive at the Russian company, said the boom in unconventional resources like shale gas, however, wouldn't last in the current market.

"The massive production of shale gas is impossible against a price that is below $6 - $8 per million British thermal units," he told the Financial Times. "Therefore we do not see in the development of shale gas any threat to us."

Gazprom in 2009 said it would meet about 10 percent of the U.S. gas demand by 2020. Most of this gas, the company said, would come from deliveries of liquefied natural gas from its projects in the northeast coast of Russia.

Medvedev said the moderate rise in gasoline and natural gas prices meant Gazprom's supplies might become more dominant in the U.S market.

The shale boom, he added, was like the Internet bubble, "which first blew up enormously and then flattened itself out to some rational and logical size."

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