Last Updated : May 16, 2012 07:46 PM IST | Source: Reuters

India asks U.S. to supply liquid shale gas: source

INDIA-US-SHALE:India asks U.S. to supply liquid shale gas: source

NEW DELHI (Reuters) - India has asked the U.S. to supply it with liquid shale gas, a government source said on Wednesday, as it continues to reduce dependence on oil imports from Iran, which are targeted by sanctions from Washington due to its nuclear ambitions.

The United States wants allies to cut oil imports from Iran substantially or face financial sanctions from end-June. It has already granted a waiver to 10 European countries and Japan, but India and China, Tehran's biggest clients, remain at risk.

U.S. Secretary of State Hillary Clinton said on a visit earlier this month the United States was helping in the search for alternative supplies of crude and has now sent energy envoy Carlos Pascual for talks on a range of energy issues.

"There was a discussion about the possibility of export of shale gas in liquefied form (to India)," the government source said on condition of anonymity.

"We expect the U.S. will positively respond...," the source added.

India has pledged to continue reducing imports from Iran, which used to be its No. 2 supplier after Saudi Arabia, but no specific target was set in talks with Pascual on Tuesday, a source familiar with the discussions said.

Refiners cut oil shipments from Iran by a third in April from March, tanker discharge data available to Reuters showed, while annual deals in effect from April 1 are likely to be at least 15-20 percent below the previous year's volumes.

India, the world's fourth-largest oil importer, ships in about 80 percent of its oil needs. It relies mostly on coal and oil for its energy demands with about a third coming from nuclear, alternative energy supplies and natural gas.

Shale gas development in the United States has turned the gas market there from shortage to glut, and cheap U.S. LNG export projects are soon expected to provide stiff competition for Australian LNG export developments.

The U.S. Energy Information Administration estimates that China holds the world's largest shale gas reserves, with 1,275 trillion cubic feet, followed by the United States at 862 trillion cubic feet.

(Reporting by Nidhi Verma; editing by Keiron Henderson)

First Published on May 16, 2012 06:32 pm

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