Three times more electricity by 2050 and with significantly lower emissions. That is the long-term challenge. Despite the recession, we invest to increase our production of cleaner-burning natural gas and maintain our leadership position in LNG.
MORE NATURAL GAS
Natural gas is the cleanest burning fossil fuel and a direct competitor to coal for power generation. A natural gas-fired power plant emits on average half the CO2 of a modern, coal-burning plant to produce the same amount of electricity. It also generates significantly less local pollution.
In 2008, we produced enough natural gas to supply nearly 190 million homes with electricity. We continued to develop a range of big, integrated projects, which we expect to boost our natural gas production further. Projects like Ormen Lange off the coast of Norway, which alone will provide 20% of the UK’s gas needs; Sakhalin II, our share of which will provide enough energy to power 6.5 million homes (see Sakhalin); and Qatargas 4, our joint venture with Qatar Petroleum. In 2008, we also signed a preliminary agreement to set up a joint venture that would gather and market natural gas in southern Iraq.
TIGHT GAS
“Tight” (hard to extract) gas offers another source of growth. In these fields, either long horizontal wells or hundreds of closely spaced vertical wells must be drilled to release gas trapped in tiny pores in the rock. In recent years big improvements in drilling techniques have made more of these projects economic. We are putting these new techniques to work at the Pinedale field in the USA and at the Changbei field in China. The Changbei project reached its full production level of around 50,000 barrels a day oil equivalent in 2008. Also in 2008, we acquired production and significantly increased our tight gas acreage in western Canada by buying Duvernay Oil Corp.
COALBED METHANE
Natural gas (methane) is also found in coalfields. Drilling wells lowers the underground pressure, releasing the methane that is chemically attached to the coal. We have acquired rights to a number of coalbed methane fields in Canada, Australia, China and Germany. In 2009, as part of a wider alliance with Arrow Energy, we completed a deal to buy 30% of its coalbed methane acreage in Queensland, Australia.
