Gail India Chief See Domestic Shale Gas Slow to Develop

Chairman & Managing Director of India's biggest gas transportation and marketing firm, Gail India, sees challenges in the development of the domestic shale gas industry.

BC Tripathi said that gas production from shale acreage is unlikely in near future.

"I'm not upbeat for shale gas for next 10 years, " Thripathi told interviewers from the Economic Times.

He pointed to challenges in land acquisition: unlike the US, landholding pattern in India is different.

"Every 500 feet, there is a change in landholdings. Shale gas would require large acreages and land acquisition in India is very difficult. In the US, land rights are with owners; here it is with the government",  Tripathi said.

The availability of large quantities of water also posed a challenge.

Thripathi said that Gail would participate in the bidding for shale gas concessions, which would follow once a  a licensing policy has been developed.

Gail India recently made a foray into the US shale market after firming up a deal with Houston-based Carrizo Oil
& Gas, picking up a 20% stake in Carrizo’s Eagle Ford shale acreage.

Gail will spend $300 million over a five year period including an upfront cash payment of $63.7 million and a carry amount of $31.3 million linked to Carrizo’s future drilling and development costs.

The deal will provide the Indian company with expertise which it hopes to lever domestically.

“Gail will be sending secondees to Carrizo to work on the Eagle Ford assets and both the companies shall also work together in exploring shale gas opportunities in India and other countries beyond US,” said Tripathi.

Armed with the JV, the Indian outfit is now likely to look to increase its presence in the US and  pursue various upstream and midstream opportunities in North America, including liquefied natural gas export to India, the CEO remarked.