ONGC eyes gas from Shale, pilot project to start in 2011

Shale gas is a form of natural gas found in rocks called Shale. North America is the largest producer, accounting for 90% of the world's shale gas output. In the US itself, shale gas accounts for only 6% of total production. However, the idea is spreading and European companies are striking joint ventures with US companies to prospect for shale. The technology is still new and hence expensive. But it is one of the cleaner sources of gas.

In India, shale deposits are found across the Gangetic plain, Assam, Rajasthan and many coastal areas, but neither the government nor the corporate sector has carried out any exploration or estimation.

Shale gas has already brought down natural gas prices by 75%, according to experts. As shale gas production rises going forward, analysts expect world's natural gas reserves to increase by at least 20%. All this is driving American companies to look for shale fields in countries like Indian, China. 

Commenting on the same, DK Pande, Director Exploration, ONGC , says the company is looking at the possibility and feasibility of gas production from shale. "The pilot project should start sometime in 2011. If we make a breakthrough, gas pricing will come down."

Surya Sethi, Former Principal Advisor to the Planning Commission on Energy, doesn't think that India will see a commercial shale gas facility at least for the next 10 years, if a pilot is going to start two years.

Here is a verbatim transcript of the exclusive interview with DK Pande and Surya Sethi on CNBC-TV18. Also watch the accompanying video.

Q: Is there any idea as to what is the extent of these deposits in India and do you think if it's commercially viable at this point in India?

Pande: We have started it very recently in ONGC looking for the possibility and the feasibility of gas production from these shales. As far as the Indian sedimentary basins are concerned, we have a lot of shale deposits but that doesn't mean every deposit will have the potential of having gas entrapped within the shales. But the chances are quite bright because shales are the mother of oil and gas and anything which is entrapped and which is not migrated, it is the shale which produces on factoring on and dealing on those things. We are looking into the possibility of this particular thing in the last three years, we have studied the samples what has been collected so far by the ONGC, we have consulted experts like Dr. Ben Law an other EGI associates, we have also consulted a company called Tera-Tech which is a pioneer in shale gas exploitation and exploration and now we are zeroing down to one basin, that is Damodar keeping in view the potentials of what shales we have seen, keeping in view the shallow nature of these shales and if the technology of what is available today for shallow levels only, we would like to go there and attempt.
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