Too early for shale gas, Gazprom says

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MOSCOW, Oct. 31 (UPI) -- The abundance of conventional natural gas reserves in Russia suggests it's premature to start a full-scale examine of shale reserves, said Gazprom.

The Gazprom board of directors announced it was investigating the global shale natural gas sector at core units in the company.

"However, the participants of the meeting agreed that at the moment shale gas production in Russia would be inexpedient due to the abundance of conventional gas reserves with their recovery cost being considerably lower than the estimated cost of shale gas production, as well as due to the considerable environmental risks," the company said in a statement.

Gazprom took note of the shale gas production boom in the United States, where Gazprom said production levels totaled 6.8 trillion cubic feet in 2011. Costs associated with shale production, said Gazprom, mean its "unprofitable for most gas producers."

Gazprom also pointed to environmental issues associated with shale natural gas production. There is a danger, said Russia's gas monopoly, that chemicals used in the extraction process could contaminate water sources.

Russia has the largest reserves of conventional natural gas in the world.