Shell’s Natural Gas Focus Puts Appalachian Assets In Spotlight

PITTSBURGH—When it comes to meeting the world’s energy demand, natural gas is playing a pivotal role in the global portfolio of Royal Dutch Shell, and its U.S. Appalachian assets are part of the mix.

The supermajor holds about 544,000 acres in north-central Pennsylvania in an area once thought to be an overly mature part of the basin. But Shell discovered a dry gas sweet spot located primarily in Tioga County that it is using to its advantage, Tonya Williams, general manager for Shell Oil’s Appalachia region, told a crowd gathered for Hart Energy’s DUG East Conference and Exhibition. With 80 trillion cubic feet of net resources in Pennsylvania, Shell produces about 440 million standard cubic feet per day with a breakeven of about $2 per MMbtu.

“So natural gas in the Appalachia Basin is going to be quite affordable for us in particular with strong Henry Hub,” Williams said, calling the play an “excellent fit” to the company’s portfolio mix of 75% natural gas and 25% oil.

As Shell works to improve its carbon footprint and reduce emissions, natural gas—the cleanest of the fossil fuels—is taking on a more prominent role in its portfolio in partnership with renewables. The company has said it will produce and sell more natural gas for power, transportation and industry uses as it aims to slash the net carbon footprint of its energy products in half by 2050.