Modeling the Shale Gas Supply Chain

Modeling the Shale Gas Supply Chain
The shale gas supply chain today is highly fragmented and both its physical components and its economics are not clearly understood.  Until recently, improving the overall supply chain has not been an area of focus for the players in the shale gas sector because of the high demand for gas and the high profit margins associated with it.  Rather, the focus has been primarily on expanding production, minimizing extraction times and maximizing output.   However, with the recent drop in oil prices there is now a rising interest in reducing costs and improving operational efficiencies.  With current political uncertainties regarding large scale pipeline efforts, such as the Keystone XL, external pressures may drive the industry towards more use by more regional industries, again emphasizing the need for a comprehensive regional perspective on the shale plays. This requires an understanding of the entire supply chain and the economics associated with each link in it.  The goals of this project are (a) clearly delineate the upstream, midstream and downstream stages in a universally accepted fashion, (b) describe the various material, information and financial flows commonly associated with a supply chain, (c) map the value stream from source to customer, and (d) link the supply chain to the external environment. Without such a mapping of the supply chain, any systematic efforts to improve its efficiency are seriously impaired.