The following is a small excerpt from a post on the CWEI board that is from a symposium recently held in the US regarding shale gas. This excerpt mentions a very significant drop in production for Gazprom which may help offset some of the price decline expected in the LNG market as new exporting terminals are completed this year and next. Regards Paul

A few other notes from the conference:

Andrew Bradford, an analyst at Bentek, said that gas production at Russian giant Gazprom fell by 35% in May 2009 compared with May 2008. That’s a drop of 14 billion cubic feet per day. That huge drop likely bodes ill both for Gazprom’s customers in Russia and in Europe.

Bradford also said that LNG demand had plummeted in several key markets: Japan was down 8%, Spain was down 7% and South Korea was down 19%. That could mean that the new LNG capacity coming online will have nowhere to go – except, perhaps, to the US.

A repeal of intangible drilling costs, a move favored by President Barack Obama in his budget proposal, would reduce capital availability in the US drilling market by 20 to 30%. Bennett said that cutting the IDCs would devastate the drilling business and would be “pretty foolish because it will mean that people won’t have enough gas to heat their homes.”

How many drilling rigs does the US need to keep production flat? Bennett wasn’t sure, but he believes the number now deployed – about 900 -- is probably about right.

Regarding shale beds, Coates of Schlumberger said “We still don’t understand why they produce the way they do.”