1st shale gas exploration bid by 2013: PM
PTI NEW DELHI INDIA will launch its firstever bid round for exploration of shale gas by end of 2013, Prime Minister Manmohan Singh said on Friday.
“The mapping of India’s shale gas resources has been undertaken and we are working to put in place a regulatory regime for licensing rounds by end 2013,” he said at the 7th Asia Gas Partnership Summit in New Delhi.
The country has, so far, only explored and produced conventional oil and gas as well as unconventional sources such as coal bed methane (CBM). Shale gas óó gas trapped in sedimentary rocks below the earth’s surface is the new focus area in the US, Canada and China as an alternative to conventional oil and gas for meeting growing energy needs.
Six basins, namely Cambay, Assam-Arakan, Gondawana, KG onshore, Cauvery onshore and Indo Gangetic basins, have been identified that may have shale gas potential.
The government, Singh said, was pursuing the development of sources of unconventional gas such as shale gas and coal-bed methane.
“We are also harnessing coal bed methane for which four licensing rounds have been held and commercial production has commenced at Raniganj in West Bengal,” he said. “As India has one of the world’s largest coal reserves, we want to work with international companies having the requisite experience and expertise for exploitation of coal seam gas.” Oil Minister S Jaipal Reddy said a National Gas Grid of nearly 30,000 km in length is planned to be built by 2017. The network with capacity of 875 million standard cubic metres per day will take natural gas to different markets across the length and breadth of India.
“India’s crude gas pipeline capacity of 230 mmscmd (Million Metric Standard Cubic Meter Per Day) is projected to quadruple in the next five years,” he said.
Reddy said the nation’s dependence on imported Liquefied Natural Gas is also projected to grow.
“To cater to the increase in imported LNG, we are in the process of increasing our current LNG handling capacity of 13.5 million tons per annum to about 50 million tons per annum by 2017,” he said.
Meanwhile, Oil Minister S Jaipal Reddy on Friday underlined the need for having a relook at petroleum product prices, but said the government is not contemplating decontrol of diesel rates just yet.
“The prices of all petroleum products need to be looked at again. However, we live in a real world, not only in numbers,” he told reporters on the sidelines of 7th Asia Gas Partnership Summit here.
Oil firms sell diesel, domestic LPG and kerosene at government- controlled rates which are way below the cost.
Even petrol, which was deregulated in June 2010, continues to be sold at around Rs 7.70 per litre less than its actual cost. “As of now, we are not contemplating deregulation of diesel prices,” Reddy said.
State-owned oil companies will need to raise diesel price by Rs 14.73 a litre if the government were to free its pricing, like it was done in case of petrol in 2010.
“There is some kind of discontinuation of deregulation in petrol prices,” he said. “But we have no intention of bringing regulation back.” Oil companies have demanded that since they have not been able to raise petrol price in line with increase in cost, they be compensated by the government for the Rs 4,500-crore loss they incurred on fuel sale. At present, the government compensates oil firms for losses only on diesel, domestic Liquefied petroleum gas and kerosene.
“Oil companies have no doubt suggested some measures.
But the Petroleum Ministry does not have independent (decision making powers on it). I will take up the issue at Empowered Group of Ministers at the appropriate time,” Reddy said.
Meanwhile, in a related development, the government Friday approved the award of less than half of the 33 oil and gas blocks that were bid for in the ninth round of New Exploration Licensing Policy (NELP).
The Cabinet Committee on Economic Affairs approved award of 16 blocks, Oil Minister S Jaipal Reddy told PTI in New Delhi.
“Bids 16 blocks were recommended for acceptance by the Empowered Committee of Secretaries, the same has been approved by CCEA,” he said. The government had offered 34 areas for exploration and production of oil and gas in the 9th round of bidding under NELP and bids for received for 33 had been received at the lose of bidding on March 28 last year.
In the previous eight rounds of NELP, 235 blocks have been awarded so far.
The 34 exploration blocks offered in NELP-IX included eight deepwater blocks, seven shallow water blocks, 11 onland blocks, and 8 Type-S (or small) on-land blocks, he said. Sources said some blocks in Mahanadi basin off the Orissa coast in east India had to be withdrawn as they fell in Naval firing/exercise areas while bids for several others had to be rejected due to various reasons.
CCEA approved award of two shallow water and two onland blocks to consortia led by ONGC. State-owned OIL led consortia got two onland blocks in the Assam-Arakan basin. Deep Energy walked away with two Cambay basin blocks while Focus Energy beat Reliance Industries to bag an area in north-west Indian Rajasthan state.
The five blocks awarded to companies like Sankalp Oil and Natural Resources, Pratibha Oil and Natural Gas Pvt Ltd and Pan India Consultants.