Caspian Report - Issue: 07 - Spring 2014

panies are obliged to submit an
environmental impact assessment
to pass the highest environmental
approvements. However, Spain’s
history of excessive bureaucracy
causes doubts about future shale
gas projects. But despite the country’s
heavy dependence on LNG imports,
Spain is tied into relatively
few long-term take-or-pay gas contracts
for pipeline gas. This gives
Spain much commercial flexibility
for its shale gas projects.
Lithuania
For the Baltic states (as with Poland),
the exploration and development of
shale gas projects represent an important
strategy for diversifying gas
supplies, to reduce their gas dependence
on Russia and to access much
cheaper gas than the expensive Gazprom
imports.
After Poland, Romania, and Ukraine,
Lithuania is considered as the fourth
most attractive country for shale
gas production in Central Eastern.
Lithuania could hold 480 bcm of
unconventional gas with around
recoverable 120 bcm. If these unconventional
gas reserve estimates
are confirmed, Lithuania - consuming
3.4 bcm in 2011 (all supplied by
Gazprom) - could supply its domestic
gas demand for the next 30-40 years.
After Poland, Romania, and Ukraine, Lithuania
is considered as the fourth most attractive
country for shale gas production in Central
Eastern.
Lithuania was the first Baltic state
to announce a shale gas tender
in June 2012. In September 2013,
Chevron won a tender for a license
to explore shale gas resources. But
few weeks afterwards, Chevron retreated.
The investment and legal
regulations adopted by the Lithuanian
government shortly after the
tender included chaotic changes to
the legal, fiscal and regulatory frameworks
(due to a lack of governmental
coordination, which made the
tender increasingly less attractive
and commercially viable. Chevron’s
withdrawal considerably damaged
Lithuanian’s pursuit of energy independence,
or at least its aim for
reducing gas imports from Russia.
It has also damaged the national
economy by deterring other foreign
investors. But it did reveal that the
government did not seek to obtain a
broad base of public support. Nonetheless,
the government remains optimistic
that a new tender will attract
serious investors.
Romania
Bulgaria, Romania and Hungary
have around 538 bcm of technically
recoverable shale gas reserves. Romania’s
annual gas consumption
is 13-14 bcm, most of which it can
cover with its own significant gas
reserves – unlike many of the neighbouring
Balkan countries. In 2012,
Romania imported 2.17 bcm of gas
from Gazprom. Despite a temporary
until the beginning of 2013, the
Romanian government continued
its negotiations with Chevron for a
shale gas exploration project in Constanta
County. In December 2012,
the Hungarian energy company MOL
and Canada’s East West Petroleum
also obtained exploration licenses
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CASPIAN REPORT, SPRING 2014