Unconventional Gas – A Synopsis Natural gas is ‘normally’ (conventionally) produced from permeable rocks such as sandstones and limestone from anticlinal traps some 1 to 3 km below the earth’s surface. Unconventional gas comes from non permeable rocks, often the hydrocarbon source rocks, and the hydrocarbons are retained in these source rocks over very large areas. Whilst production from conventional reservoirs is relatively simple and flow to surface can occur naturally the gas from unconventional reservoirs requires the combination of horizontal drilling and fracture stimulation to enable commercial quantities of gas to flow to surface. Gas production from ‘unconventional’ gas resources is not new, for example, coal bed methane is the feedstock for the 15 to 20 Million tonnes per annum of LNG projects scheduled to come on stream in Queensland over the next 3 to 5 years. Further, unconventional gas from shale gas contributed approximately 15% of the total gas production in the USA during 2009. Over recent times, there have been various reports of activity in the shale gas industry in the USA, all pointing to the major turnaround in the overall natural gas supply situation in the USA due to the extremely large plays (resources) of shale gas. Only 5 to 7 years ago, the USA was forecast to become a net importer of LNG to supplement the then dwindling production of natural gas from conventional sources. However, just over the last few years, with the rapid acceleration achieved in delineating and developing shale gas resources, the USA is now looking at becoming a net exporter of natural gas with various companies now seeking to convert proposed LNG importation terminals to export LNG terminals. Further, the major IOC’s are paying a lot of money to achieve a position of future ownership of the shale gas assets, as evidenced by recent sales of shale gas resources. For example, in early 2011 BHP agreed to purchase Chesapeake’s US shale gas assets in one state (Arkansas), being for a reputed total volume of 2.4 TCF for a price of $4.7 billion, and in 2008 BP paid $1.9 billion for 25% of Chesapeake’s (Fayetteville) shale gas assets just a month after it bought Chesapeake’s Woodford shale gas resources in Oklahoma’s Akhoma Basin for $1.75 billion. In 2010, Exxon/ Mobil acquired XTO Energy Inc, a shale gas producer for $34.8 billion. PetroChina is buying 50% of a prolific shale gas project from Canada’s Encana Corp for $5.4 billion, marking the largest Chinese investment yet in a foreign gas asset. Not too dissimilar to the CNOOC/Chesapeake deals, the PetroChina/Encana tie-up is another win-win that enables China to acquire quick exposure to the shale gas boom in North America. Shale Gas Diagram of Shale Gas The following schematic, gives a visual description to the various ‘plays’ showing conventional and ‘unconventional’ hydrocarbon accumulations. Figure 1: Schematic of ‘unconventional’ shale gas accumulations.     Diagram: Shows Australia’s major sedimentary basins, domestic gas markets and pipelines.