Reliance reportedly in another US shale gas deal

The Financial Times is reporting that India's Reliance Industries Ltd, is expected that it will pay $1.35bn to acquire a stake in a Texas shale gas field controlled by Pioneer Natural Resources of the US.

Under the terms of the deal, to be unveiled after “the close of business” in New York on Tuesday, Reliance is purportedly buying a 45 per cent holding in the Eagle Ford shale gas field in south Texas.

Under the Pioneer deal, Reliance will pay $300m up front for the stake in the shale field and settle the balance over four years.

Last Friday, Reliance Chairman Mukesh Ambani told shareholders that the company aims to build a significant position in the shale gas business.  Ambani hinted at heavy investments to be done by the company in this sector in coming days.

“Reliance aspires to build a significant position in the shale gas business,” Ambani said at his company’s annual general meeting  in Mumbai.

“During the year, we will continue to pursue such joint development opportunities with the best operators as well as on our own to build a substantial upstream business in North America,” he added.

In April, Reliance paid $1.7bn for a joint venture with Atlas Energy, Inc., taking a 40 per cent interest in the acreage owned by the US Company in Marcellus shale gas field on the borders of Pennsylvania, West Virginia and New York states.

Dallas-based Pioneer said last month that it had drilled its fifth successful well in the Eagle Ford field. “To further accelerate Eagle Ford shale development, the company is actively pursuing a joint venture, with an announcement expected by the end of the second quarter of 2010,” Pioneer said last month.

Reliance operates the world’s biggest refinery complex in a single location on India’s west coast and the country’s largest gas field on its east coast.

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