Investor Presentaiton
Shale Gas Revolution Led to an Increase in Natural Gas Consumption
Key Considerations
■ The shale gas revolution led to a 48% surge in natural gas output in
the US in the seven years to late 2012.
Natural gas prices started falling significantly and now stand at only
a quarter of the prevailing level back then.
Drop in natural gas prices led to an increase in gas consumption in
the US, especially by power generation industry.
As gas prices fall significantly power plants switched to using natural
gas for base load generation rather than coal and as a result
significantly more gas-fueled power capacity was added in the US.
Source: Sberbank CIB
TMK
With Gas Prices Falling Gas-Fueled Power Capacity Extended
US Electricity Generation by Fuel, 1991-2015E (mln kW/h per year)
4,500
Million kW/h per year
3,600
1993
2,700
14%
53%
1,800
I
19%
900
11%
!13%
0
1991 1994
Drop in Gas Prices Led to an Increase in Gas Consumption
US Gas Consumption Breakdown (bcm)
■Natural Gas
1997 2000 2003 2006
Renewables* Nuclear
Coal
*hydroelectric, biomass, geothermal, solar/PV, wind
Source: US Department of Energy
US power generation fuel costs, $/MWh
2012
1%
138%
I
19%
13%
30%
2009 2012 2015E
■Oil and other liquids
bcm
750
700
650
600
550
647
500
450
400
64
713
US gas
consumption,
Decline in
residential
2007
and
Growth in
Growth in
US gas
industrial and electric power consumption,
other consumption 2012
commercial consumption
consumption
Source: US Department of Energy, Sberbank CIB
U.S.$/MWh
80
60
40
228 22
120
100
Parity for gas is achieved at $3/mmBtu
(about $24/MWh). "
0
2007
2008
2009
2010
2011
2012
Coal
Natural gas
Source: US Department of Energy, Sberbank CIB
21
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