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ONGC finds India’s first shale gas

NOC hails ‘significant’ shale-gas discovery in West Bengal

OIL and Natural Gas Corporation (ONGC) has made India’s first shale-gas discovery. The state-owned company says the discovery, on 25 January in the Barn Measure shale, West Bengal, happened after extensive studies were carried out on basins across the country.

ONGC has been studying the Damodar, Cambay, Krishna Godavari and Cauvery basins, which it says are “promising” areas for shale gas. ONGC prioritised West Bengal’s Damodar basin, where it is already producing coal-bed methane (CBM), because of the “shallow nature” of the shale formations and “abundant water availability”.

Although the project is still in the early assessment stages, ONGC says the breakthrough is “significant” for India, which is trying to develop an unconventional-gas industry.

ONGC had already drilled several wells in India, with the help of Schlumberger as part of a research and development project. The company drilled four wells in the Damodar basin, two wells in the Raniganj basin in West Bengal and another two wells in North Karanpura basin in Jharkhand.

ONGC says the pilot shale-gas project “will put India on the shale-gas map of the world” and has “opened up new hopes for meeting our energy needs”.

Although India’s exact shale-gas resources are unknown, the International Energy Agency (IEA) reckons reserves in the Asia-Pacific region alone could top 274 trillion cm. India has previously focused more on its CBM reserves, which the government says could reach 50 trillion cm. But output is limited. Great Eastern Energy, one CBM operator in the country, manages only 100,000 cm/d from its Raniganj project.

The IEA says India’s electricity demand will almost quadruple by 2035. The country hopes to replace some of its coal-fired generation with natural gas, amid predictions that pollution and emissions will soar on the back of fast economic growth and power consumption.

India has signed up to the US Shale Gas Initiative, a scheme which aims to promote the transfer of shale-gas technology and expertise from the US, in November 2010. The government is in the process of fleshing out shale-gas legislation and identifying blocks for auction. Analysts say tax and royalty regimes must be streamlined to attract investors to the sector before the auction takes place.

Meanwhile, Indian firms have bought positions in North America’s shale-gas industry, partly in a bid to gain expertise. Reliance Industries secured acreage in Texas’ Eagle Ford Shale in a joint venture with Pioneer Natural Resources and also owns a stake in some of Atlas Energy’s Marcellus shale operations. State-owned Bharat PetroResources has also gained a foothold in shale-gas acreage in Western Australia.

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