UPDATE 1-Poland's shale gas hopes buoyed by promising test output

Wed Aug 28, 2013 10:16am EDT

Related Topics

* Lane Energy is extracting shale gas in Poland

* Daily amounts unseen in Europe, but at non-commercial rates

* Says too early to define chances for commercial success

WARSAW, Aug 28 (Reuters) - Lane Energy Poland, an exploration company controlled by ConocoPhillips, said it is extracting some 8,000 cubic metres of shale gas per day at a test well in northern Poland, an amount unseen in Europe to date.

Poland, whose hopes for shale gas faded after three international firms quit after disappointing drilling results, has been looking for signs of bigger quantities of the unconventional gas, which could help it reduce its reliance on Russia.

"Lane Energy Poland confirms the Lebien 2H well is currently flowing some natural gas, however at non-commercial rates," Laurie St. Aubin, President of Lane Energy said in a statement sent to Reuters, confirming a report by Rzeczpospolita daily.

Lane Energy started production testing at its well in the northern city of Lebork in July.

Although the daily amount of gas being produced there still does not qualify as commercial production, is the largest obtained in any shale gas well so far in Europe, the newspaper said.

"It is too early in the exploration phase to determine if there is opportunity for commercial success," St. Aubin also said, adding that more wells will need to be drilled to confirm gas can be flowed at commercial rates.

The company plans two or more wells through 2014.

"This is very good news for Poland and European oil geology," Piotr Wozniak, deputy environment minister and Poland's chief geologist, was quoted as saying.

He said the results should encourage other companies to speed up work on shale gas exploration.

Polish refiner PKN Orlen is expected to announce the results of production tests at its shale gas well in Syczyn in eastern Poland, which Wozniak has described as one of the most promising in the country.

Poland, which consumes 15 billion cubic metres of gas a year, mostly imported from Russia, has estimated its recoverable shale gas reserves at up to 768 billion cubic metres.

It has issued more than 100 shale gas exploration licences to local and international firms which have drilled 48 wells to date.

Some companies, however, have complained that the commercial output of shale gas is being delayed by red tape and difficult geology. This year, Marathon Oil and Talisman Energy followed Exxon Mobil in pulling out of Poland.

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