Demand for products and services used in US shale gas development will grow to nearly $50 billion in 2015 as industry activity continues to escalate in the emerging Marcellus, Haynesville and Fayetteville shale plays. While shale gas drilling will slow from the rapid buildup of the 2005-2010 period, the industry will still bring more than 8,000 new producing wells online through 2015. Increasing demand for drilling and completion products and services for new shale gas wells will be accompanied by growing markets for workover, restimulation, and well site reclamation services in areas where production is maturing. Low natural gas prices since 2008 have narrowed the profit margin of shale gas investment. Shale gas producers are responding to this trend by seeking improvements in well economics, in many cases through the use of highervalue products and services. Through the forecast period, shale gas producers will continue to embrace innovations such as multiple-well drilling pad systems and advanced hydraulic fracturing materials in order to improve drilling efficiencies and increase per-well gas output, thus bolstering profitability as gas prices remain below 2008 highs.
Tubular goods, drilling fluids and proppants to lead gains
Demand for drilling equipment and consumables in the shale gas plays will grow to more than $6.8 billion in 2015, led by nearly double-digit growth in tubular goods, the largest equipment category. Shale operators will continue to consume more tubular goods overall and on a per-well basis. Growth in demand for chemicals and materials will slightly outpace that seen for drilling equipment and consumables, reflecting the intensive material demands of the wells that will be drilled in the newer shale plays. Stimulation products, especially proppants, used in hydraulic fracturing will be the dominant source of chemicals and materials demand.
Source: Market Watch
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