India plans to rope in the US for technical knowhow to tap shale gas reserves when President Barack Obama visits the country next month.
"There have been some discussions.
We hope to sign a memorandum of understanding (MoU) during the US President's visit," petroleum minister Murli Deora said at the Economic Editors' Conference on Wednesday.
US companies have made a major breakthrough in tapping shale gas, an unconventional gas found in sedimentary rocks, while India is just venturing into the field.
Petroleum secretary S. Sundareshan said India was looking at cooperation with the US in ascertaining the shale gas resources base in the country.
The agreement is expected to be signed with the US Geological Survey for knowledge- sharing in the area of shale gas.
Shale gas is trapped in geological shale formations and was previously very difficult to extract. US firms have now developed technologies that have made it commercially viable to crack these tight rock formations and produce large quantities of shale gas.
The director general of hydrocarbons S. K. Srivastava said that several basins in India are known to hold shale gas resources. However, primarily the focus is on three basins - Cambay in Gujarat, Assam- Arakan in the North- East and Gondwana in central India.
The petroleum ministry is drawing up plans to throw open areas for the exploration of shale gas for the first time in the country in 2012.
Action is on to develop a framework for an assessment of resource potential, which would lead to exploitation of this resource.
The director general of hydrocarbons and the petroleum ministry are working on the changes required in the exploration laws for shale gas to be produced, because current exploration licenses do not include unconventional sources.
Shale gas is the new focus area in the US, Canada and China as an alternative to conventional oil and gas for meeting growing energy needs.
These unconventional deposits have raised estimates for US gas reserves from 30 years to 100 years at current usage rates.
Shale gas deposits were not considered worth tapping before Houston billionaire George P. Mitchell pioneered new extraction techniques in the 1990s.
The shale gas sector has seen a spate of acquisitions since last year, including three assets acquired by Mukesh Ambani- run Reliance Industries in the US. In April, Reliance Industries took a 40 per cent stake in USbased Atlas Energy's Marcellus Shale acreage in a deal valued at $1.7 billion. This was followed up with the purchase of a 45 per cent stake in Pioneer Natural Resources' Eagle Ford shale natural gas asset in Texas for $ 1.3 billion in June this year.
The company then made its third purchase in August with a smaller $ 392 million investment for a 60 per cent stake in a shale gas joint venture with Houston-based Carrizo Oil & Gas. In the biggest shale gas deal so far, Exxon Mobil agreed to acquire XTO Energy Inc for about $30 billion in December last year.
China has also entered the race to buy into North America's shale natural-gas sector.
Shale gas has emerged as a game- changer for the US with large supplies of shale output pushing natural gas futures to a one- year low.
Shale gas output in the US has also displaced imported liquefied natural gas (LNG), making more of this energy source available for other countries and resulting in softer international prices.
Courtesy: Mail Today
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