Shale gas policy only by end-2013

Auction of shale gas blocks is set to be delayed by at least a year as the government now plans to come out with its policy statement on the segment only by the end of 2013 and not end-2012 as planned.

“We will complete mapping by March and in the next 3-6 months, we will have the policy in place. We want to start the first round by end-2013,” said G C Chaturvedi, secretary, Ministry of Petroleum and Natural Gas.

Shale gas, or natural gas trapped in sedimentary rocks (shale formations) below the earth’s surface, has emerged as an alternative source of energy in countries like the US, Canada and China.

In India, six basins are reported to have good potential for shale gas — Cambay in Gujarat, Assam-Arakan in the North East, Gondwana in central India, Krishna-Godavari onshore (in Andhra Pradesh), Cauvery onshore and the Indo-Gangetic basins.

However, exploration of shale gas requires horizontal drilling and uses a lot of chemicals, which could lead to contamination of the groundwater. The government is, therefore, moving cautiously while formulating the shale gas policy.

India’s gas demand is likely to rise from 290 million metric standard cubic metre per day (mmscmd) in 2012-13 to 470 mmscmd in 2016-17. Against this, domestic supply will increase from 124 mmscmd to 220-230 mmscmd only.

The US Energy Information Agency has estimated that China holds nearly 1,275 trillion cubic feet reserves of shale gas.

On the other hand, surveys conducted by different agencies in India have estimated the country’s shale gas reserves at anywhere between 300 trillion cubic feet and 2,100 trillion cubic feet.

Reliance Industries had entered into an agreement with US-based Carrizo Oil & Gas to acquire a 60% stake in Marcellus shale acreage in central and northeast Pennsylvania earlier this year. The company would be investing around Rs1,800 crore for this.