India Plans Shale Gas Block Auctions

India Plans Shale Gas Block Auctions

NEW DELHI - The Indian government is finalizing its shale gas exploration policy and expects to launch its first auction of shale gas blocks by December 2013, Junior Oil Minister R.P.N. Singh told an energy conference Wednesday.

India expects its shale gas reserves and imports from the U.S. to compensate for a shortfall in local gas production that has affected operations at power plants, refineries and petrochemical units and is forcing it to buy expensive liquefied natural gas from other regions.

June gas production fell for the 19th month in a row to 3.53 billion cubic meters, declining 11.1% from a year earlier, following lower output at Reliance Industries Ltd.'s east coast block.

The shortage of gas has badly hit many power plants across the country and also hurt the flow of investment into the sector, forcing the government to open diplomatic channels and engage producers for long-term supply deals, build new terminals to regassify imported LNG and expedite work on a transnational pipeline.

China will soon launch a second round of shale gas auctions and is targeting 6.5 billion cubic meters of annual production by 2015, from close to none this year. India's total gas output in the year ended March 2012 was 47.55 billion cubic meters.

India is also in talks with the U.S. to import shale gas even though it doesn't have a free trade agreement with it, Additional Oil Secretary Sudhir Bhargava said at the conference.

LNG imports are expected to rise to 150 million standard cubic meters a day by March 2017 from 40 MMSCMD now, Mr. Bhargava said, adding that the country needs to quickly seal deals with exporters to hedge against price volatilities and secure supplies.


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